Bill C-27 Bad news for Defined Benefit Pension Plans such , including the Canada Post Pension Plan
The Federal Government, has introduced Bill C27 into the House of Parliament. This Bill amends the Pension Benefits Standards Act –which covers the Canada Post Pension Plan — and allows the pension plans to be changed to an inferior Target Benefit Pension Plan.
This is an attack on our Canada Post Pension Plan and could result in future and current retirees having poorer pensions. Currentlyall CUPW, Canada Post retirees have a Defined Benefit Pension Plan.
The Liberal government is following the Conservatives’ lead by introducing legislation that will allow employers to reduce pension benefits.
Bill C-27, An Act to amend the Pension Benefits Standards Act, had its first reading in the House of Commons last week.
A Target Benefit pension plan is a big gamble
This bill will allow employers to shift from good, defined benefit plans that provide secure and predictable pension benefits, into the much less secure form of target benefits.
Unlike a Defined Benefit plan, where the employer and employees contribute and retirees know how much they can expect when they retire, the amount you receive under a target benefit pension plan is just that, a target. Meaning, the plan aims to give you a certain pension benefit, but there’s no guarantee.
The other big difference is that Target pension benefit plans shift the financial risk from the employer to employees and pensioners.
In certain circumstances current retirees pensions can be reduced under a Target Benefit pension plan.
There is a process for retirees to have a voice on whether or not we want a Target Benefit pension plan, instead of our current and much more secure Canada Post Defined Benefit Pension Plan,but it is convoluted.
I am enclosing a briefing note from the Canadian Labour Congress on this issue. briefing-note-cdn-council-bill-c27-2016-11-08-en
Please contact your MP and tell her or him that you oppose this legislation and do not want your Canada Post Pension to become a Target Benefit Pension.
I will send you more information and more calls for action as they become available.