For those retired and working employees who could be impacted by the change, their retirement benefits could be drastically reduced even though they have paid into the plans for years and budgeted on the basis of what they expected to receive when they retire. Defined Benefit plans require employees to give employees a monthly payment regardless of their investment returns. Accrued benefits are legally protected and cannot be clawed back. While such plans are not as cheap as alternatives such as Defined Contribution plans, they offer workers greater retirement security.
of the Canadian Labour Congress(CLC), Hassan Yussuf, said that the bill, C-27 was an "unconscionable betrayal" and an "attack on future and current retirees.' The text of the bill can be found here.
The bill has the innocent title: " Act to amend the Pension Benefits Standards Act 1985". It removes the legal oblgation of employers to protect already accrued benefits. As the CLC
put it: "Bill C-27 removes employers’ legal requirements to fund plan benefits, which means that benefits could be reduced going forward or even retroactively. Even people already retired could find their existing benefits affected, after paying in their entire working lives."
In a letter to Morneau, Yussuff
said: "C-27 was introduced without notice or consultation with Canadians, pensioners, or unions and proposes measures that directly contradict election promises to improve retirement security for Canadians. If enacted, it will have negative implications for private and public-sector DB plans in every jurisdiction in Canada." Yussuff noted that the Liberal platform spoke of guaranteeing retirement security whereas the bill does the exact opposite. The platform promises to boost the Canada Pension Plan.
Ironically, the former Harper Conservative government in April 2014
had tried to loosen rules around public sector pension plans and encourage the growth of Targeted Benefit plans. There was such strong opposition that the Conservatives dropped the plan. In 2015
they floated changing pension plans again. Now it seems it is the Liberals who are carrying on Harper policies. Opposition to such policies is what resulted in the Liberals being elected.