A private member’s bill with all-party support in the House of Commons currently before a Senate Committee could fundamentally improve pension security for retirees across the country.
Bill C-228, An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act and the Pension Benefits Standards Act, 1985, would amend bankruptcy and insolvency legislation to give “super-priority” to funding the deficit of a pension plan.
“For too long workers have witnessed employers paying out corporate bonuses or paying creditors after declaring bankruptcy, all while the company’s own pension deficit is allowed to go unfunded. This often forces already-retired workers into poverty as their pension benefits are slashed,” said Lana Payne, Unifor National President. “It doesn’t have to be this way. All the Senate needs to do is to pass Bill C-228 as-is, which already received unanimous support in the House of Commons.”
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Les MacDonald, Unifor National Executive Board Retirees Representative, presented to the Senate committee on Feb. 15, 2023. He asked the Senators to respect retirees and pass the bill into law.
“In bargaining, pensions are a large portion of monetary conversations. Members end up making immediate sacrifices to their present wages in order to earn long-term, guaranteed retirement benefits. However, the current BIA and CCAA statutes do not offer any protections that can provide peace of mind at retirement for a pension that is being drawn particularly from a single employer defined benefit pension plan,” said MacDonald to the Senate committee.
Currently, if an employer has a defined-benefit pension plan and declares bankruptcy or insolvency, the plan needs to be wound up so that all pension assets are paid out. Pension plans may suffer from wind up deficits, a term that calculates the amount of additional money needed to fund the benefits to 100% for retirees on the date of wind up. Bill C-228 will put any outstanding amounts due to the pension fund wind up ahead of secured creditors, regardless whether the corporate entity declares bankruptcy or restructuring.
MacDonald drew on examples from Unifor’s own history and membership, where bankruptcy and insolvency of a company led to disastrous effects for retired workers, including the well-publicized Sears Canada bankruptcy.
“Eddie Lampert, Sears Canada’s largest shareholder, landlord and supplier doled out $6 billion dollars to buy back shares and dividends from 2005 onwards to profit himself, yet the company continued to carry a $260 million pension deficit that would have been extinguished easily, had Bill C-228 been the law in 2017.
“By end of Dec 2015, Sears reported 14,015 retirees with an average annual lifetime pension of only 5,141 Canadian dollars, literally $428 per month. While Unifor wasted no effort in representing our Sears retirees in insolvency, they were forced to settle with a 30% cut to these already low benefits,” MacDonald added.
Retirees earn their pensions during their working career. These deferred wages must be guaranteed, especially where the employer has every ability to pay their own pension deficits.
Add your name to the Congress of Union Retirees of Canada’s petition in support of this Bill, and tell the Senators to protect pensions.