Bill 54
will sabotage real pension reform
What is it about pensions that too many politicians just don’t ‘get’?
It’s not nuclear science. Money safely accumulated in a pension plan
during one’s working years should be available, in full, to the
beneficiary upon retirement.
But that’s too confusing to Liberal MPP Jeff Leal, of
Peterborough. He’s got an idea that money put into a pension plan during
working years should be left vulnerable to the appetite of the vultures
on Bay Street.
Leal has introduced a private member’s bill at Queen’s
Park - Bill 54 - that, if adopted, would dodge real pension reform by
enabling insurance companies and the mutual fund industry to profit at
the expense of those who badly need pension security.
Leal’s plan would require employers with more than 20
employees to provide a retirement savings plan. It would not, however,
require employers to contribute to it. Workers would be allowed (or
pressured) to opt out of the plan. The bill would not result in any
meaningful increases in economies of scale, risk sharing or portability
of Ontarian’s retirement savings.
Bill 54 would trample the rights already enjoyed by
pension plan contributors. As it stands, under the provincial Pension
Benefits Act employers are required to pay 50 per cent in contributions.
And the RRSP program, under federal law, is entirely voluntary.
What’s particularly worrisome is that unlike most
private members bills that end up going nowhere, the government of
Dalton McGuinty has cleared the way to move Leal’s bill to Second
reading. Is the Premier actually endorsing a disastrous piece of
legislation that puts the hard-earned money of working people into the
risk-happy hands of stock marketeers and pension brokers? Let’s hope
not.
The Ontario Federation of Labour, including OPSEU, has
come out strongly against Bill 54. If the financial tsunami of the past
two years has taught us anything it is that we should be building a
stronger public pension vehicle, like the Canada Pension Plan (CPP), and
not weakening an already fragile pension industry.
The CPP is the most effective savings vehicle for
retirement. Almost every working Canadian is already covered by it – and
it is portable no matter where we work or how often we change jobs. It
is financially solid. The CPP’s fees are the lowest pension
administration fees in the country – lower than private pension plans
and much lower than those on RRSPs offered by the financial services
industry.
The real priority of governments should be to expand and
strengthen the CPP. Only one in five private sector workers can look
forward to the prospect of a retirement pension. In the absence of a
private plan – and Bill 54 does not deliver a guaranteed solid plan – it
is the responsibility of governments to expand pension benefits so that
these workers can achieve the right to a decent standard of living in
what should be their ‘golden years.’
As we take the necessary steps to repair the damage
inflicted on pension plans over the past few years now is the time to
draw all parties together – governments, sponsors, trade unions and plan
members – in a campaign to make our pension system sustainable for
decades to come.
MPPs at Queen’s Park can do their part by putting Bill
54 through the shredder.
In Solidarity
Patty Rout
First Vice-President / Treasurer
