Pension trustees and activists from Components of the National Union of Public and General Employees (NUPGE) gathered in Ottawa last week to discuss challenges facing members’ pension plans and to share information about how to respond.
“Our members depend on us to help them achieve the secure retirement they deserve”, said Elisabeth Ballermann, NUPGE Secretary-Treasurer. “There was a lot of knowledge in the room and it was a great chance to learn from each other.”
In both the roundtable discussion of members’ pension plans and in questions and comments for the guest speakers, the range and depth of the participants’ experience was clear.
Attack on workers’ pensions one reason income inequality rising
Larry Brown, NUPGE’s President, spoke about the threats to pension plans and how the attack on workers’ pensions increases income inequality.
“The 100 highest paid CEOs in Canada received a 12.6 per cent increase in 2015. Yet they turn around and attack workers’ defined benefit plans,” said Brown.
“Income inequality in Canada has become so severe that the 2 wealthiest individuals have as much money as the poorest 11 million people.”
Roundtable discussion shows work done by trustees and other activists
What was clear in the roundtable discussion of Component members’ pension plans was the commitment both members and staff bring to the table. Defined benefit pension plans provide the most secure and cost-effective post-retirement income. Workers benefit from pooling their resources and, because they know approximately what they’ll be getting in retirement, they don’t have to “over save.” But defined benefit pension plans are under attack from employers who want workers to shoulder all of the risks involved in retirement planning.
Defined benefit plans under attack
James Harnum, a lawyer with Koskie Minsky specializing in pensions, spoke about efforts by governments and other employers to convert defined benefit plans to target benefit plans. This includes recent federal government legislation, Bill C-27, An Act to amend the Pension Benefits Standards Act, 1985, which would allow employers to undermine defined benefit plans.
Part of the fight to protect pensions is making sure workers know about the additional security defined benefit plans provide. Both Hugh O’Reilly, President and CEO of OPTrust and Sheri Wright, the Vice President of Stakeholder Relations and Communications for the Alberta Local Authorities Pension Plan (LAPP), spoke about the need to educate members and the public on defined benefit plans.
Responsible investment and infrastructure
A concern for many pension activists is whether pension funds are being invested in ways that are contrary to members’ interest. Peter Chapman, Executive Director of Shareholders Association for Research and Education (SHARE), spoke about the way pension funds can influence the companies in which they are invested.
Infrastructure investments are one type of investment where questions are being raised. Elisabeth Ballermann, Secretary-Treasurer of NUPGE outlined some of the issues with infrastructure investments, particularly when P3 privatization schemes are involved.
While the expansion of the Canada Pension Plan (CPP) is good news, pension plans will need to look at how it affects their members. That was the message from Chris Roberts, the National Director of the Social and Economic Policy Department at the Canadian Labour Congress (CLC). He suggested that how pension plans respond will likely depend on how well funded they are and what level of benefits they provide.