Tuesday, February 03, 2009
Honourable Dwight Duncan
Minister of Finance
Province of Ontario,
Dear Minister Duncan,
I am writing to you on behalf of the many thousands of members and spouses of the Steelworkers Organization of Active Retirees (SOAR) who reside in the province. Many of our SOAR members and officers of chapters had the opportunity to make presentations to the Expert Commission on Pensions. We therefore welcome this opportunity to comment on the work of the Commission and the report, "A Fine Balance", particularly at this time of great economic uncertainty.
We believe this to be to be a serious and well balanced report that merits action this year. We very much concur with the sentiment expressed by Harry Arthurs when at the end of his report; he observed that "delay must be avoided if at all possible. The time for moving ahead is now", especially, given these uncertain economic times, Minister suffice it to say that many of these retirees played by the rules, they went to work regularly, did their jobs to the best of their abilities, worked hard all of their lives, paid taxes, contributed to savings and other financial vehicles, entrusted deferred wages to their employer plan sponsors in the expectation that upon retirement they would have sufficient pension income to allow them to live out their golden years in dignity. Many of them have been betrayed by the economic system in which they put their trust; we have in this report an opportunity to correct some of this wrong and make it right.
There are actions which the government can take in the short term. Among them, is to give retirees a say in what happens when their pension funds are being discussed. Harry Arthurs wrote, "Retirees should no longer be referred to as "former members" of plans, but rather as "retired members". "They should be given effective access to all information available in any plan governance process in which active members may participate".
Harry Arthurs, in his report put a lot of emphasis on creating pension plans with a large capital base that was not dependent on one employer. We believe that Quebec and Canada Pension Plan provides the best vehicle to do this. We do not seek to have it replace all voluntary plans but rather would like to see its coverage gradually expand to provide up to 50% of contributable earnings. Such a move will not only ease the demands on negotiated plans but also provide a portable plan, a fact especially important given that fewer and fewer workers have the option of working for one employer for their entire working lives.
Minister, the report has made a number of broad recommendations for reinvigorating Ontario's pension system, we wish to highlight those that we believe should be supported and implemented, and we would welcome the opportunity to speak to them in greater depth when the government moves forward. At this time we think it is sufficient to list the recommendations in which we concur.
Recommendations 9-2 and 9-3 which speak to expanding pension coverage.
Recommendations 9-4 and 9-5, as highlighted above, this speaks to an expanded Canada Pension Plan, or comparable provincial plan.
Funding of Pension Plans
Recommendations 4-1 to 4-2 which speak to changes to methodology of the actuarial valuations and the expanded powers of the Superintendent.
Recommendations 4-4 to 4-7 which speak to expanded power for the Superintendent to order an interim valuation if a plan is at risk of failure.
Recommendation 4-17 which addresses concerns about contribution holidays by plan sponsors. However, we would have to ensure that there was adequate regulatory oversight to police this recommendation, as is called for in recommendation 4-6.
Recommendations 4-20 and 4-21 which speak to the need for indexation in the event of an inflationary emergency.
Pension Plans in a Changing Economy
Recommendations 5-2, 5-4, 5-6 and 5-7 speak to the need to establish an Pension Agency to receive, pool, administer, invest and disburse pension funds left stranded when plan members cannot be found or cannot find the plan to which they formerly belong.
Recommendations 5-3, 5-4 and 5-6 speak to need to permit transfers of members among plans.
When plans fail
Recommendations 6-1 to 6-4 speak to the power of the Superintendent to identify plans at risk of failure.
Recommendations 6-5, 6-9 and 6-15 speak to the distribution of assets.
Recommendations 6-13 to 6-18 speak to the urgent need to increase the level of monthly benefits eligible for protection from $1000 to $2,500.
Regulation and Governance
Recommendation7-9 and 7-10, 7-18 to 7-25 speak to the need to replace the FSCO by a new Ontario Pension Regulator with enhanced powers.
Recommendation 7-26 to 7-31 speak to the replacement of the FST by a new body, the Pension Tribunal of Ontario with exclusive and ultimate jurisdiction over matters arising out of or incidental to the PBA.
The recommendations, referenced above are supported with one caveat, which is that the success of the proposed new tribunal will depend on its members being clearly seen to represent, and to equally balance the interests of members and management backgrounds. Consequently, the selection process is therefore an essential element in creating and maintaining the legitimacy of the tribunal.
The commission also made a number of recommendations designed to enhance the regulator's efficiency, transparency and accessibility to all parties affected by its decisions. In addition, the Commission stressed the need for pension plans to improve the process, quality and transparency of their own decision – making, and to facilitate greater participation in plan governance by active and retired plan members. We concur in the following recommendations.
Recommendation 7-5 and 7-6
Recommendation 8-2 and 8-3
Recommendation 8-4 to 8-7
Recommendation8-28 to 8-30
Minister, in implementing these recommendations your government has an opportunity to protect the interests of a growing number of Ontarians and to protect the financial interests and economic future of one of the most vulnerable group of people in our society, at a time in their lives when they are least able to protect themselves. Let's not miss this opportunity.
On behalf of the thousands of members of SOAR residents in Ontario, we ask your immediate attention to these matters.
National SOAR Coordinator
On behalf of; Harry Hynd, SOAR Vice President,
Dan McNeil, District 6 SOAR Board member.
Reg Duguay, District 6 SOAR Coordinator.
Honorable Dalton McGuinty, Premier
John Tory, Leader, Progressive Conservative Party
Howard Hampton, Leader, New Democratic Party
Gerry Martiniuk, Seniors Critic, Progressive Conservative Party
France Gelinas, Seniors Critic, New Democratic Party
Paul Miller, Pensions Critic, New Democratic Party
Ken Neumann, National Director USW
Wayne Fraser, District 6 Director USW