A pension is a deferred wage that employees should be entitled to because they have earned it. Many Canadian corporations aren't informing workers about the values or functionality of their private plans. The Pension Commission of Ontario has the responsibility for the protection and regulation of private pension plans.
In the early 1980s, strong investment returns caused plan assets to exceed liabilities by a wide margin. As the piles of large excess returns started to bulge, employers got creative.
"And if they weren't actually applying to the Commission for approval to withdraw money, many employers were using the surplus assets to reduce their own contributions to the plan. Such "contribution holidays" required no approval from anyone."
Chapter 5: The Battle For The Dominion Stores Pension Plan
The reality over the past couple of decades has been a clear transfer of wealth from pensioners to employers and shareholders. Surpluses should be used for adjusting pension benefits for retirees and improving them for current employees. Whenever inflation rises a few percentage points, its the retired employees living on fixed incomes that suffer.
"What they see is that in the last decade billions of dollars in surplus assets have accumulated in defined - benefit pension plans at a time when the real value of their own pension investment was sinking like a stone in calm waters. Worse, they see that these surpluses have accumulated at a time when more than half of all older Canadians were obliged to apply for welfare in the form of federal or provincial supplements to survive."
Chapter 7: False Promises: Big Business And High Finance
The outcome of these pension wars will determine the quality of life that society experiences in the years ahead. Pension issues are complicated and employees sometimes feel reluctant to discuss them with their employer. However, this reluctance has allowed employers to take money that should belong to them and pocket it.
Ann Finlayson is a writer, reporter and researcher. She has taught at York University and in the Magazine Journalism program at Ryerson Polytechnical Institute.