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Ontario budget misses the mark in addressing retirement security

Review of pension plans in the broader public sector misses the mark completely for the tens of thousands of workers who have no pension coverage at all.

Toronto (1 April 2011) – The 2011 Ontario provincial tabled earlier this week included some focus on pensions and retirement security for Ontarians.

In particular, the budget document noted that the government is still committed to modest CPP expansion, along with most provinces other than Alberta, Quebec, and fence sitting Saskatchewan. As a national issue, however, CPP expansion can’t happen without the consent of two thirds of the provinces representing two thirds of the Canadian population.

Similarly, the budget notes that the Ontario government is working with the federal government and other provinces to implement the federal government’s proposed Pooled Retirement Pension Plan (PRPP), which is far from an adequate solution to Canada’s retirement security problem.

The budget also addressed the multiplicity of pension plans in the broader public-sector (BPS).

"The BPS has about 70 smaller single-employer pension plans, many of which have fewer than 100 active plan members. The government will appoint a third party to pursue options for greater efficiencies, including the consolidation of plan administrative functions, pooling of assets for investment purposes and use of technology. The purpose of this review would be to achieve savings and help manage pension funding requirements"

According to the Ontario Public Service Employees Union (OPSEU/NUPGE) this initiative misses the mark completely for the tens of thousands of workers in the BPS who have no pension coverage at all.  OPSEU points out that it has already built a pension plan built for the BPS, the TOPPSfund, which is able to achieve what the government is hoping for on many fronts: a jointly-governed, target benefit plan.

OPSEU’s budget analysis points out, “Many existing single-employer pension plans could have been freely negotiated into TOPPS. OPSEU presented the TOPPS option to the government but funding seemed the key barrier.

The budget did contain a surprise announcement outlining a government proposal to require pension plans in the province to disclose whether investments they make on behalf of plan members have addressed environmental, social and governance risks.

It also included proposals to allow terminating plan members to directly transfer lump-sum pension entitlements toward the purchase of a life annuity, if allowed under the terms of their plan.

NUPGE

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