Pension Funds – Pensioners Forgotten

At a time not so remote many companies took subscription holydays from their fixed income pension plans, encouraged by unbelievably great returns on investment of such funds. The Law allowed it and some companies even took prolonged holidays. Wisdom would have recommended not to take such holidays and to carry on reaping the benefits of their investments in order to have more funds for difficult times, since they always end up coming. What could have happened happened and the large scale financial and economic crisis that hit us now has placed many companies at the edge of the cliff.

So they cried for help and requested that governments alleviate the compulsory refunding their pension plan deficits. In agreement with employer associations and trade unions the Quebec government granted such alleviations, which led to the adoption of the Bill No 1, on January 15, 2009. Let us recall that this legislation allows, among other things, the extension of the amortization period for the consolidated deficit from 5 to 10 years. According to Minister Sam Hamad, the alleviations introduced by this Law will have a "neutral effect on the pensions paid to retirees".

This is not our opinion, because the new Law rather seems to weaken even more the pension plans it claims to help. Moreover, its application is conditional to a new regulation yet to come and standards that will be emitted by the Canadian Institute of actuaries (CIA) in April 2009, which increase the uncertainty already generated by the new Law.

But the shoe pinched most when the parties (government-employers-trade unions) agreed on the provisions of Bill No 1 without even consulting the retirees. Despite the fact that retirees have paid their part in their pension funds, just like employers and union employees to build this common patrimony, they have been ignored. In all fairness retirees should have had their say. So why were they left aside? When this dereliction is added to the astonishing speed with which this Law was adopted, we are even more justified to be anxious.

The ravages of time that are inflicted to us, morally as well as bodily, are already heavy enough to bear. Contempt does not need to be added. Retirees don’t ask better than being part of the solution, rather than the problem, providing that they are consulted instead of being treated like children.

Let us recall that the law on Complementary Pension Plans applies to 950 fixed income plans which gather a million workers and retirees. Such a force impossible to circumvent. Retiree associations will make good use of it in order to ensure the security of their pensions.