October 28, 2009
Ottawa is improving its protection for employee pensions in federally regulated industries, but stopping short of helping millions of Canadians who have no retirement savings plan or have seen workplace schemes shredded by corporate bankruptcy.
One reform that won broad kudos is a legislated process to help extremely troubled companies facing big pension deficits work out this problem without collapsing. Mr. Flaherty said it is based on the system that Finance used earlier this year to help Air Canada restructure its pension problems. Under this process, companies in critical financial condition will be given more time to repair pension deficits, provided their board declares that they cannot make necessary pension payments and the relief is approved by the Finance Minister.
"The one really practical proposal is the workout scheme that will provide all plan stakeholders with flexibility to help prop up pension plans in crisis situations," says Mitch Frazer.
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