Update on Bill C-27
Update on Bill C-27
On Fri, Feb 16, 2018 at 12:47 PM, Aline Burlone wrote:
Hi Gerry: I met with my MP Jonathan Wilkinson and his assistant Sarah on Friday, February 2. I have sent the information to Laurie Boyd about this but I was talking to another person who went to see her MP for the District of North Vancouver/Burnaby and we wondering about the responses we both received
We were both told that the changes under bill C-27 only applies to Crown Corporation and federally regulated private companies. And that BC already has legislation enabling Target Benefits plans. – Should we be concerned about the provincial change?
They also told us that even if the majority of people opt for the TBP those who choose to stay on the DBP would retain it and nothing would be changed. They also said that for unionized workplaces changes would have to be done through collective bargaining.
So we were wondering: if this is correct, it seems that all is well unless we have totally missed or misinterpreted something. Is there something else we should be aware of? Do you know if the information we were given is correct or not?
Thanks! Aline Burlone
On 2018-02-17, at 11:09 AM, Gerry Tiede wrote:
Thanks for talking with your MP and for your report. It’s clear that the MPs you talked to are Liberal members because that is the speaking notes them been supplied with. It’s true that a strict reading of Bill C-27 applies to only federally regulated companies. And it is also true that many provinces already allow some form of Target Benefit (TB) pensions plans. Our Cost-of-living arrangements are a target benefit plan in that they are not a guarantee – the goal is to pay full cost of living if the payments are sustainable. And they are sustainable, in our case.
We would support Target Benefit Plans if they were newly set up plans. We think having a TB plan is better for someone than having no pension plan.
The problem is that the legislation allows the surrender of Defined Benefit Plans (Like our pension plan where the benefits are guaranteed) to a TP plan where the benefits are not guaranteed. And since this legislation has been introduced, some provinces have jumped on the bandwagon and are considering similar legislation for provincial plans. For example, Manitoba has started a consultation about implementing TB plans. Manitoba teachers might be impacted if this goes ahead. Nova Scotia is in the same position. New Brunswick has already implemented TB plans and they have reduced the pension promises for both active and retired teachers.
Our concern is that as this gains acceptance, it will become even more wide-spread. Our teachers’ plan looks safe now, but if the investment returns turned really bad, perhaps a future government might decide to solve the problem by introducing TB plans here. In New Brunswick, I understand that the government threatened to close the plan if the parties didn’t accept the TB plans. So while they say that people will only be moved into TB plans if they agree to it, there can be some very strong pressures to agree to it.
Here’s another concern: If we could imagine that the active teachers in BC got moved (forced) into a TB plan and the retired teachers stayed in the DB plan. What would happen to the retired teachers group if there was a shortfall of funding? Would the government make up the shortfall? I don’t think they will and that means that our pensions would be reduced. I don’t think that this is likely to happen in BC in the foreseeable future, but if that started to become normal practice in other provinces, the pressure would eventually come here too.
If this doesn’t make sense, we should talk on the phone. Let me know if you would like that.