It appears that the federal government’s target benefit proposal is missing its target date.
It appears that the federal government’s target benefit proposal is missing its target date.
Canada’s largest private-sector union, Unifor, published a bulletin to members saying the controversial target benefit plan proposal was being delayed.
“You did it!” Cheryl Robinson, president of Unifor Local 2002, stated in the bulletin. “The conservative government's proposed target benefit plan framework has been shelved because of your efforts.”
The controversial proposal had unions worried the plan was designed to kill the defined benefit pension, which ensures that employees receive a guaranteed payout at retirement.
The federal government first unveiled its proposal for target benefit plans in April 2014. The delay seems to be an about-face from a fall pledge by Kevin Sorenson, minister of state for finance, that changes were imminent. The 60-day public consultation period with employers, unions, pension experts and other stakeholders wrapped up last June.
“The government continues to work on Target Benefit Plans,” David Barnabe, a spokesperson for the Department of Finance said in an email to LHP.
“The comments received by stakeholders are being reviewed and we cannot speculate on the timing of the TBP framework.”
The target benefit plans would offer a minimum level of guaranteed benefits, but employers would have the flexibility to increase or cut payouts or require higher contributions depending on the plan’s performance and market conditions.
In a letter to Sorenson, the national president of Unifor, Jerry Dias, urged the government to look to alternatives in the future. “The next step is to focus on constructive retirement policies that will benefit all Canadians: expand the Canada Pension Plan, reinstate Old Age Security at age 65,” wrote Dias.
The government said the new voluntary plan would be open to those who work for Crown corporations or federally regulated businesses such as railways and airlines.
But approximately 1,200 Unifor members wrote the union to say they were concerned about losing their defined benefits pension plan through the new legislation.
“They are particularly concerned with the provision that would allow the conversion of accrued defined benefit plans to target benefit plans. Defined benefit pension plan members understand the importance of the pension promise,” Dias wrote.
Canada’s largest private-sector union, Unifor, published a bulletin to members saying the controversial target benefit plan proposal was being delayed.
“You did it!” Cheryl Robinson, president of Unifor Local 2002, stated in the bulletin. “The conservative government's proposed target benefit plan framework has been shelved because of your efforts.”
The controversial proposal had unions worried the plan was designed to kill the defined benefit pension, which ensures that employees receive a guaranteed payout at retirement.
The federal government first unveiled its proposal for target benefit plans in April 2014. The delay seems to be an about-face from a fall pledge by Kevin Sorenson, minister of state for finance, that changes were imminent. The 60-day public consultation period with employers, unions, pension experts and other stakeholders wrapped up last June.
“The government continues to work on Target Benefit Plans,” David Barnabe, a spokesperson for the Department of Finance said in an email to LHP.
“The comments received by stakeholders are being reviewed and we cannot speculate on the timing of the TBP framework.”
The target benefit plans would offer a minimum level of guaranteed benefits, but employers would have the flexibility to increase or cut payouts or require higher contributions depending on the plan’s performance and market conditions.
In a letter to Sorenson, the national president of Unifor, Jerry Dias, urged the government to look to alternatives in the future. “The next step is to focus on constructive retirement policies that will benefit all Canadians: expand the Canada Pension Plan, reinstate Old Age Security at age 65,” wrote Dias.
The government said the new voluntary plan would be open to those who work for Crown corporations or federally regulated businesses such as railways and airlines.
But approximately 1,200 Unifor members wrote the union to say they were concerned about losing their defined benefits pension plan through the new legislation.
“They are particularly concerned with the provision that would allow the conversion of accrued defined benefit plans to target benefit plans. Defined benefit pension plan members understand the importance of the pension promise,” Dias wrote.
