A further fault the new act perpetuates is lack of by right involvement of pensioners in governance of pension plans. Pensioners may be beneficiaries of the majority of a plan’s assets yet have little say in their management. That is reserved for active employees (members), and employer. Advisory committees on which pensioners will have membership count very little in actual governance.
The very description of pensioners as “former members” entrenches this practice. As we see with NewPage when the plan runs into difficulties pensioners have to scramble to form an association to protect their interests. Such protection should be built into plan governance from the start. The new act harmonizes with Ontario legislation, but that is a low bar to leap on the path to improved protection of pensioners interest.
You were too easy on those three cranky old men who delivered their report on the gold plated MLA pensions. The Three Stooges, of long ago Hollywood movies could have done a better job. We all know or ought to know the elephant in the room was the spectre of Defined Contributions instead of Defined Benefits. It was enough to make the civil service pensioner negotiators shudder.
Not that many years ago , government pension plans could only invest in safe but low yield government bonds. The stock market was performing so well that employee unions bargained for and won the right to have their pension funds invested in the stock market. The employer would make up any shortfall. In the case of government plans ,that you and me. Today the stock markets are world wide entities that are
highly unpredicatable, often on a daily basis. Ask the Greeks and Italians.
Defined Contributions for all future employees is the way of the furure.
My previous comment was forwarded inadverently before I had fully developed my thoughts.However I will let it suffice for now.
,but will wonder how we can expect legislators to correct the system when they are the biggest beneficiaries of unfunded pensions
I find it ironic that the two mayors decrying the pension problems of the paper mill workers are both recipients of the gold plated MLA pension plan
There is so much wrong with pension plans in Canada that it is difficult to assign blame.It is an area of benefits that has never been assigned a true cost or an analysis of the reality of expectations.
The complete system must be reworked. A person cannot expect to take out more than he and his employer contribute plus an annual growth factor of the real rate of return (historically about 2%).This must be spread over true life expectancy term.
A more viable system would be for matching contributions by Eee and Eor to a predetermined amount to an RRSP which would belong to the Eee and be portable.This would be ,in effect,a defined conrtibution plan and would be administered by the existing RRSP.
It seems to me that the pension plans that are “in trouble” are those that are run by the “company/union” and are defined benefit plans. Also seems that the rest of us in small business that offer our employees pension benefits use defined contribution plans managed by a third party (ie insurance companies) and have no troubles of under funding….biggest challenge is the swings in the stock market….GIC’s are always an option!
A further fault the new act perpetuates is lack of by right involvement of pensioners in governance of pension plans. Pensioners may be beneficiaries of the majority of a plan’s assets yet have little say in their management. That is reserved for active employees (members), and employer. Advisory committees on which pensioners will have membership count very little in actual governance.
The very description of pensioners as “former members” entrenches this practice. As we see with NewPage when the plan runs into difficulties pensioners have to scramble to form an association to protect their interests. Such protection should be built into plan governance from the start. The new act harmonizes with Ontario legislation, but that is a low bar to leap on the path to improved protection of pensioners interest.
Randy Barkhouse | November 18, 2011 |
You were too easy on those three cranky old men who delivered their report on the gold plated MLA pensions. The Three Stooges, of long ago Hollywood movies could have done a better job. We all know or ought to know the elephant in the room was the spectre of Defined Contributions instead of Defined Benefits. It was enough to make the civil service pensioner negotiators shudder.
Not that many years ago , government pension plans could only invest in safe but low yield government bonds. The stock market was performing so well that employee unions bargained for and won the right to have their pension funds invested in the stock market. The employer would make up any shortfall. In the case of government plans ,that you and me. Today the stock markets are world wide entities that are
highly unpredicatable, often on a daily basis. Ask the Greeks and Italians.
Defined Contributions for all future employees is the way of the furure.
Name | November 18, 2011 |
My previous comment was forwarded inadverently before I had fully developed my thoughts.However I will let it suffice for now.
,but will wonder how we can expect legislators to correct the system when they are the biggest beneficiaries of unfunded pensions
I find it ironic that the two mayors decrying the pension problems of the paper mill workers are both recipients of the gold plated MLA pension plan
Bill Fenton | November 17, 2011 |
There is so much wrong with pension plans in Canada that it is difficult to assign blame.It is an area of benefits that has never been assigned a true cost or an analysis of the reality of expectations.
The complete system must be reworked. A person cannot expect to take out more than he and his employer contribute plus an annual growth factor of the real rate of return (historically about 2%).This must be spread over true life expectancy term.
A more viable system would be for matching contributions by Eee and Eor to a predetermined amount to an RRSP which would belong to the Eee and be portable.This would be ,in effect,a defined conrtibution plan and would be administered by the existing RRSP.
Bill Fenton | November 17, 2011 |
It seems to me that the pension plans that are “in trouble” are those that are run by the “company/union” and are defined benefit plans. Also seems that the rest of us in small business that offer our employees pension benefits use defined contribution plans managed by a third party (ie insurance companies) and have no troubles of under funding….biggest challenge is the swings in the stock market….GIC’s are always an option!
Tim Tregunno | November 17, 2011 |