Nortel Networks Corp., Stelco Inc., Sears Canada Inc. These are just a few of the many bankruptcy or restructuring cases that have catapulted the financial state of company pension plans into the spotlight.

But while the attention generally focuses on protecting the company’s employees and retirees, it’s important to remember that there are a number of different interests to balance during a corporate bankruptcy, says Jana Steele, a pension lawyer at Osler Hoskin & Harcourt LLP in Toronto.

Read: Assessing the prospects of retiree motion to wind up Sears pension plan

“It’s a matter of where should that deficiency fit in the priorities,” she says. “And so, it’s not a simple question, because when you think about all the different creditors of a company that’s going under . . . it’s not simple enough to say this pension debt, this underfunded amount should jump over everybody and be first, in my view. I’m not saying it’s right or wrong. I’m just saying it’s a much more complex question . . . because there are a lot of interests that come into play in the situation of a corporate bankruptcy. ”

Among the concerns is the ability of companies to obtain debtor-in-possession financing while they restructure. Would giving priority to pension matters imperil the loans that struggling companies need to continue operating?

The questions arise as the federal New Democratic Party recently introduced its End Pension Theft campaign, along with a plan to introduce a bill aimed at prioritizing pensions in bankruptcy situations in order to protect employees and retirees. Calling it pension theft is an absolute misnomer, says Steele.

While the NDP’s campaign doesn’t reference a specific employer, it comes amid significant discussion about the recent cases. When it comes to what the other federal parties have to say on the matter, a spokesperson from the Conservative Party of Canada told Benefits Canada it’s unable to comment on the NDP’s proposal since it’s related to a specific business that is currently undergoing restructuring within the courts.” As for the Liberals, he prime minister’s office didn’t respond to a request for a comment.

Read: NDP launches End Pension Theft campaign, proposed changes to bankruptcy laws

As the debate continues, what do you think about the NDP plan? Is there room for changes to federal bankruptcy laws to better protect employees and retirees?

Have your say in our weekly online poll here.

As for last week’s online poll, which asked whether internet-based cognitive behavioural therapy is a viable option to include in benefits plans, the majority (77 per cent) of respondents said online therapy can be effective and help make psychological services more readily available. The remaining 23 per cent of respondents disagreed, saying employers should stick to supporting more traditional in-person services.

Read: Assessing the impact of online therapy as digital health tools proliferate

Copyright © 2020 Transcontinental Media G.P. Originally published on

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