Pensions funding levels should be kept at 100 per cent, otherwise there could be trouble: MPP Miller
QUEEN’S PARK – In the legislature on Tuesday, Hamilton East-Stoney Creek NDP MPP and Pensions critic, Paul Miller, expressed concern over the Ontario provincial government’s decision to relax funding rules for pension plans which he says could be a problem for pensioners.
“Essentially what the government is doing here is creating more ‘Sears,’ ‘Nortel,’ or ‘US Steel’ disasters,” said Miller. “Who knows which company will be next, but with an 85 per cent solvency rate benchmark, there could be many more groups of distraught pensioners down the line.”
The Wynne government’s newest pension proposals suggest pensions have solvency funding levels at 85 per cent, as opposed to the current required rate of 100 per cent. 100 per cent solvency means the pension plan could afford to pay out everything it owes to plan members, if necessary. If companies are allowed to keep solvency rates at the lower 85 per cent level, Miller said there could be a negative impact.
“Lower solvency rates could lead to a higher likelihood that pensioners will not receive their full pensions if a company goes belly up,” Miller said. He went on to recommend funding solvency rates not be adjusted by the government.
“The right thing to do would be to keep these rates at 100 per cent-- Liberals need to start making changes to pensions that will help pensioners not solely take into consideration the interests of big business.”
Miller also called out Liberals for not clearly detailing the new proposed solvency rates in the budget bill.
“While the government has said that the solvency requirements for pensions will be 85 per cent, according to this legislation there is no clear solvency requirement. So, essentially, this legislature is going to be forced to vote on this bill without knowing what ‘reduced solvency deficiency’ means.
“That’s huge. How can we know the implications of this bill if we don’t have any way of knowing what it says?” asked Miller.