On October 19, 2016, the federal government tabled Bill C-27, which proposed a legal framework for the introduction of Target Benefit pension plans. Several labour groups have received media attention recently, with strongly-worded criticisms of the proposed legislation.
As described in our earlier article November 21, “BPG efforts pay off”, the language in Bill C-27 represents a significant win for BPG, in that employers who wish to convert a pensioner’s existing DB pension plan to a Target Benefit plan, can only do so with the consent of that individual (this consent requirement was absent from the government’s initial discussion paper on the subject). As a result, should this legislation pass, every Bell pensioner can take comfort in knowing that their DB pension cannot be changed without their individual agreement. That said, Bell has advised BPG that it currently has no plans to offer a Target Benefit plan.
However, BPG acknowledges that the labour groups are raising an important concern with the proposed legislation as it applies to active unionized employees who are entitled to a DB pension. For those individuals, consent to a proposed conversion of their accrued DB pensions to a Target Benefit plan can be provided by the union on behalf of its members. This has the effect of putting their already-earned pension benefits on the table for future collective bargaining. Understandably, the labour groups see the consent mechanism applicable to their members as imperiling their DB pensions.
BPG will continue to follow the progress of Bill C-27, with the goal of working to ensure that Bell pensioners’ DB pensions are protected, through the requirement for informed, individual consent to any plan conversions that may be permitted, both in the legislation and in the associated regulations.