Canadian pensioners need protection from corporate default, particularly during and post COVID-19. Compared to other jurisdictions, Canada significantly lags in its protection of pensioners. In the UK, 90% or more of pensions up to at least $57,000 annually are protected through a national pension benefit scheme. In the U.S. the Pension Benefit Guaranty Corporation protects pensioners; in 2018 a 65-year-old’s pension is guaranteed up to U.S. $71,431. In Canada, only Ontario offers some protection, and that is only “bottom-up” protection of $18,000 annually.

1.3 million Canadians with corporate defined benefit pension plans are potentially at risk of having their pensions cut. Canada needs pension reform to ensure that pensions of hard-working Canadians are not lost due to insolvency or bankruptcy. CanAge supports the calls of the Canadian Federation of Pensioners and the National Pensioners Federation for needed pension protections.

Recommendation #103: Create Pension Benefit Guarantee Funds Across Canada

Create Pension Benefit Guarantee Funds for all jurisdictions. Ensure pensioners receive 100% of their deferred wages – the pension their employer committed to. Currently, pension guarantee funds exist only in Ontario.

Recommendation #104: Fully Funded Pension Funds

Require pension funds to be fully funded to 100%.

Recommendation #105: Recurring Refundable Tax Credit

Establish a recurring refundable tax credit equal to the annual pension loss experienced by a pensioner. If legislation is amended to ensure pensioners receive their full pension or if a pension insurance program is created, this credit will serve as a backstop to ensure these changes work to protect pensioners.

Recommendation #106: Flexible Pension Reform

Operationalize modern tax and pension policies to allow for increased options for flexible retirement and a hybrid pension withdrawal and income-earning model.