Keeping a close eye on the pension industry
March 20, 2009
If the financial meltdown of the past year has taught us anything it is that pension plans – if not closely monitored and guarded against corporate negligence – can, in too many cases, shatter the retirement dreams of tens of thousands of working families.
Imagine putting in a lifetime of contributions to a pension plan that you expected would carry you through your retirement years only to discover the cupboard is bare because what you thought was “guaranteed” has been squandered by so-called money managers and investors on Wall Street or Bay Street.
But that is the reality facing too many retirees today in Canada and around the world. What should be their golden years has instead turned to rust because they’ve been played for as pawns in a game of greed by those whose interests only extend to their own pocketbooks.
With these thoughts in mind I was pleased to represent OPSEU at the federal review panel on pensions in Toronto on March 20 where I shared some thoughts on how trade unions can best protect the interest of their members when it comes to management of pension plans.
While I expressed our support for a thorough review of pension programs in Canada I cautioned against any quick-fixes that might provide temporary satisfaction but that leave unanswered problems that may come back to haunt us down the road.
Yes, we find ourselves in the midst of a financial tsunami on world money markets, but let’s not use this as an excuse to construct short-term fixes that may not stand the test of time.
For this reason and others OPSEU fully supports a broad-ranging discussion between sponsors and plan members, trade unions and employers, and provincial and federal governments. In this spirit we fully support the idea of a national pension summit to be held later this year.
I told the panel that we must steer clear of bad management practices over our pension plans. It’s nothing but bald hypocrisy for employers who take contribution holidays in the good times to abruptly plead poverty when it comes to making contributions to defined plans when the economy slows down.
Unlike many trade unions like OPSEU that deliberately put away funds for a rainy day, too many employers choose to ignore a prudent investment strategy that will carry their pension plans through good times and bad.
At OPSEU we put into place contingency reserves, why can’t the private sector do the same?
I stressed that this is not the time to abandon defined benefit pensions. The costs to employees will be high in lost benefits, but the costs to governments will be high, too. Who else if not the government will support the large number of pensioners who face the risk of retiring into a world of poverty?
The final point I made to the panel was this: defined pension plans work. And they work best when they are responsibly managed. That means transparency should rule. Let’s toss out the fine print and demand complete disclosure when it comes to how pension plans are managed. OPSEU fully supports the joint-trusteeship of pensions in order to ensure responsible and ethical management.
As we struggle to emerge from the storm clouds buffeting international money markets we must not lose sight of maintaining stability in our pension plans. At OPSEU we have always erred on the side of sound and ethical management. We are confident this approach will benefit our member over the long term, thereby ensuring peace-of-mind for retirees.
In Solidarity
Patty Rout
First Vice-President / Treasurer
