“The basic legal framework for the workplace pension system in Ontario is sound”, the IAM has told the Expert Commission on Pensions in Ontario. The Commissioner, retired York University President and Dean of Law Harry Arthurs, has been given the task of recommending changes to the Ontario Pension Benefits Act (PBA). He is holding public hearings and will report by mid-2008.
In its submission, the IAM acknowledged that, after 20 years without major revision, the PBA is due for a thorough review and updating. The IAM proposed changes which would maintain and improve the security of workplace pensions.
The IAM rejected the idea, put forward by some employer representatives, that loosening current funding requirements, and leaving plan members at greater risk of loss, would increase coverage by making plans more attractive to employers.
The IAM insisted that any changes which could reduce pension funding must be offset by other stronger standards. For example, restrictions on contribution holidays might offset looser funding requirements for solvency deficiencies.
The IAM also debunked the notion that making it easier for employers to take surplus out of pension plans would encourage employers to expand pension coverage. In fact, such changes would offer incentives for employers to wind up plans in order to more easily get their hands on pension surpluses.
Finally, the IAM called for improvements in the minimum standards in the PBA, including immediate vesting of pension rights (vs. the current two years), mandatory inflation indexing, increasing the maximum coverage levels for the Pension Benefits Guarantee Fund, and instituting requirements for joint governance of workplace pension plans in Ontario.
