Pionairs submission to Finance Canada on proposals to support the sustainability of and strengthen the framework for federally regulated private pension plans.
Background
As part of the Government of Canada’s COVID-19 Economy Response Plan which introduced temporary funding relief measures last year, the Department of Finance committed to consult with stakeholders on options to provide additional solvency funding relief in 2021, as necessary.
Following up on that commitment they issued a consultation paper titled Strengthening Canadians’ Retirement Security which contains a series of questions and potential short term and longer proposals to support the sustainability of and strengthen the framework for federally regulated private Defined Benefit (DB) pension plans. The paper includes proposals covering pension plan governance, solvency reserve accounts, variable payment life annuities and guidelines on special funding relief. You can view the consultation paper on the Government of Canada’s website.
Air Canada Pionairs and other stakeholders were invited to comment and provide feedback on the paper.
Pionairs response
The Pension Committee consulted with third party professionals throughout December and January and our response to the various different topics contained in the paper was submitted in January 2021.
Overall, our position continues to be that the most important aspect of retirement security for federally regulated pension plans continues to be amending insolvency legislation so that a plan sponsor’s unfunded pension liabilities are paid and put ahead of secured creditor claims in the event of the sponsor’s bankruptcy. Our submission restated that and emphasized that any temporary solvency funding relief should respect the rights of retirees.
You can view the submission on the Pionairs website; after logging in, go to Pensions > Latest Updates or Click Here.