While a re-elected Liberal government may introduce some measures to protect private pension plan members, it’s unlikely to pursue super-priority similar to what was proposed by the Conservative Party and the New Democratic Party on the federal election trail, according to a pension lawyer.
“I think that there may be some measures to address the rights of pension plan members, such as a move to allow other types of distributions other than annuity purchases — but [super-priority] wasn’t in their platform and I just don’t think it’s going to be part of their agenda,” says Susan G. Seller, a partner in the Toronto office of Bennett Jones LLP and the head of its national pension and benefits practice.
The ruling party’s parliamentary record appears to support the idea that it is indifferent to implementing super-priority-related reforms. In the previous session, all but 10 of the sitting Liberals had opposed a private members bill that would have imposed super-priority status on pension members. The bill was supported by members of the Conservative, New Democratic and Green Parties and the Bloc Québécois.
The Liberals adopted several measures to improve retirement security and protect pension plans — including changes to the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act — following a consultation launched in 2018.
Seller says she doesn’t expect to see super-priority measures because “everything we’ve seen from the government consultation is focused on a much broader perspective and how those types of measures — despite being aggressively advocated for by certain groups — have to be considered in the broader context and the general marketplace and the interests of other creditors, as well as whether any changes would affect the sustainability of defined benefit plans and the impact on credit.”
On the campaign trail, the Liberals promised to increase the guaranteed income supplement by $500 for single seniors and $750 for senior couples. And it also said in a press release that it would restore “the retirement age to 65 from 67 after the Conservatives raised it.”
It’s likely the federal government will continue to expand and strengthen the public retirement income security system,” says Sellers. “We already have the [Canada Pension Plan] enhancements that are being phased in over time, but they’re also looking at other CPP enhancements, including an increase to the survivor benefit and old-age security, which is a focus on broad-based measures to assist seniors, particularly low-income seniors.”
And the Liberals’ climate change plan will also likely introduce climate-related disclosures for pensions, she says. “In the case of federally regulated plans, it will probably mean a requirement to disclose whether they take ESG factors into consideration, similar to what we already have in Ontario. The federal government had already signalled they were looking at that.”