All workers have a right to a decent pension | National Union of Public and General Employees

All workers have a right to a decent pension

The Ontario Public Service Employees Union responds to the report of the Ontario Expert Commission on Pensions.

OPSEU Submission on the Report of the Ontario Expert Commission on Pensions - Download PDFToronto (6 March 2009) – The Ontario Public Service Employees Union (OPSEU/NUPGE) has joined with the general labour movement in calling for reliable and sustainable pension coverage for all of Ontario's workers.

In a submission to minister of finance, responding to the report of the Ontario Expert Commission on Pensions, the union notes that 62% of workers have no pension at all and are left to fend for themselves on retirement.

OPSEU suggests two solutions:

  • Proclaim into law a new Ontario Pension Agency with the authority to increase portability, minimize split pensions and provide investment and administration services to smaller pension plans.
  • Expand the Canada Pension Plan (CPP) to provide similar services and universal coverage.

Larger pension plans are better

Another immediate solution, recommended by the commission and strongly supported by OPSEU, is for the government to work with large plan sponsors to open the doors of these plans to larger memberships. Economies of scale are critical for increased coverage. Larger plans, jointly governed, cost less and provide better benefits. However, these plans have shrinking memberships. The Ontario government must immediately facilitate this economy of scale, OPSEU said.

The union welcomed the balance struck by the commission and urged the finance minister to continue discussions with labour on implementation of the report. Indeed, the context for such discussion has become urgent with the severe economic downturn precipitated by the global crisis in financial markets, OPSEU said.

Asset values have dropped dramatically; stark unemployment figures appear daily, and the ultimate impact on pension plans is not yet known. But it has been widely noted that the funded ratios of defined benefit plans are plunging. As a result, OPSEU welcomed the proposal to increase benefits for the Pension Benefits Guarantee Fund. These benefits will be sorely needed by workers in manufacturing industries particularly hard hit by the economic crisis, the union said. 

Plan funding

OPSEU said funding rules should not follow a one-size-fits-all approach. Jointly governed plans need less regulation than single employer plans which, in general, have lower funded ratios. It welcomed the concept of a solvency funding exemption for larger plans along with increased disclosure of funding and governance policies as well as investment policies related to socially responsible investment practices.

Indeed, given the ongoing financial crisis, principles of responsible investing, such as those promoted by the United Nations, are even more critical, the union said, adding that Canada lags behind other countries in this regard.

OPSEU also said it appreciates that the commission report did not propose that employers be given wholesale access to surpluses, as they have been seeking, and that the commission is prepared to accept security margins which – over extended periods of time – protect plan integrity and guarantee benefit security.

No contribution holidays

Since it is likely that the financial crisis has eroded plan surpluses, employers must be prevented from taking any further contribution holidays, OPSEU said.

In this regard, it argued that the commission did not go far enough: contribution holidays should only be taken with the informed consent of plan members and retirees in cases where there is no joint governance. Moreover, in the current economic climate, employers should not be allowed to put up letters of credit or asset pledges in place of cash payments into pension funds that, especially now, may need infusions of capital, OPSEU said.

End defined contribution plans

Workers with defined contribution plans have been devastated as they see their individual savings shrink. Now, of all times, it should be clear to all that defined contribution plans cannot provide the benefit security people need. OPSEU called for an end to conversions to defined contribution plans and encouraged the government to consider new plan designs that:

  • Provide collectivity in economies of scale.
  • Are publicly delivered and avoid the high fees rampant in the financial industry.
  • Balance benefit security with plan affordability.

Plan democracy

Most plan members in Ontario are represented by their union in joint trusteeship of their plans.  OPSEU has argued that there can no longer be a one-size-fits-all approach to funding pension plans and that joint governance is an essential part of risk management in funding policy. Joint governance allows for plan members to have a more direct interest in their plan and thus have more information about their plan.

Joint governance then should be encouraged along with the extension of plan rights to retirees (a principle that is already OPSEU policy). This must include a more solid public basis for the training of trustees and plan members, the union said.

Trustee training

OPSEU also called on the government to provide a comprehensive approach to trustee training (provided by a new public agency committed to high quality pension management). This could be similar to the U.K. system, and should be developed through discussions among government representatives, service providers, labour leaders, employers and retiree representatives.

OPSEU said such a system would insist on the same expectations, standards and credentials for all trustees, whether from the financial industry, management, unions or retirees. A revised Ontario pension law should map out in detail the requirements for trustee knowledge, the submission said. 


The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 340,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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