The Pension Protection Act moves pensioners to the front of the line of creditors to be paid out during bankruptcy
Ottawa (20 October 2011) – Federal NDP pension critic and member of parliament for Hamilton East-Stoney Creek, Wayne Marston, reintroduced legislation earlier this week to put pensioners first when their former employers go bankrupt.
The Pension Protection Act moves pensioners to the front of the line of creditors to be paid out during bankruptcy or restructuring proceedings.
Marston explained that pensions are earned, and should be recognized as deferred wages. These deferred wages should be there in their entirety when a person retires. Currently, when a company goes into bankruptcy, pensions are considered unsecured debt, and only paid out from the company’s remaining assets - long after the Crown, banks and other investors get their money.
“At the present time, someone who has been retired for a decade, after working for a company for 30 years, can suddenly find their pension cut by upwards to 40% through no fault of their own, simply because her former employer goes into bankruptcy,” said Alain Giguère, NDP deputy pension critic and member of parliament for Marc-Aurèle-Fortin. “This is wrong, and the law must be changed.”
“With another possible downturn looming, and more bankruptcies or restructurings likely, it’s more important than ever that pensions are protected. As always, it’s a matter of priorities," said Marston. "Highly profitable banks and Investment Bankers have the Conservatives looking out for their interests. New Democrats will continue to fight on behalf of the rest of us.”
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