Recently Bill 236, the Pension Benefits Amendment Act was passed into law at the Ontario Legislature. According to government, the bill represents the first phase of pension reform in the province. While bill 236 introduces rather nominal changes to the regulatory regime governing pension plans, it does contain a number of positive provisions that serve the interests of pensioners and plan members. For example, bill 236 provides plan members with immediate rights to eventually receive benefits from the plan and will allow some laid-off plan members to receive pension benefits at an earlier age. To read more about bill 236 click here
Unfortunately, the modest reforms introduced by bill 236 will do little to redress the difficult realities facing many pensioners. For example, bill 236’s provision to provide pension plan members and retired members with more timely access to information about the fund fails to give them any kind of mandate for governance. Members can’t, for example, indicate whether or not certain types of investments, investment structures or compensation structures are appropriate for people who want more stability rather than a huge amount of future growth in the pension fund. As a result, pensioners’ interests are often sub- merged in favor of the active members, who have a different interest. The liability of many funds is actually more weighted in favor of the retired members rather than the active members, and yet they have no proportionate level of input to the governance of the organization. Similarly, it is great to address the issue of deficiency funding but it is of no value to the pensioners if the company itself goes bankrupt and no means/backup funds are set aside to protect their pension benefits.
Finally, bill 236 does very little to address the overall pension crisis and it remains to be seen whether or not a second phase of more comprehensive pension reform will be forthcoming in Ontario. CARP highlighted these shortcomings and emphasized the urgent need for a national supplementary pension plan during its presentation on bill 236 to the Ontario Finance committee. To read a transcript of CARP’s presentation to the Ontario Finance committee click here: click here
Keywords: pension reform