The Voice of Multi-Employer Plan Interests in Canada

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Thank you for the opportunity to provide comments on the Consultation Paper Pension Benefits Act Review (CP). We would like to point out that the CP’s commentary that target benefit plans are new is not accurate. In fact, they’ve existed for many decades in most Canadian jurisdictions, including Manitoba. These plans have typically been multi-employer pension plans (Multi-Unit Pension Plans - MUPPs – under the Manitoba PBA) which have all of the features of “new plans” as defined in the CP.

We provide our responses to the CP’s specific questions.

Part 3 – New Plan Designs

  1. Should Manitoba develop a regulatory framework for a new target benefit or shared risk pension plan design? Yes, target benefit plans should be subject to a regulatory framework appropriate for this type of plan. The risk assumption, contribution structure and governance are different for a target benefit plan and other defined benefit pension plans. The regulatory framework should reflect these differences. The regulatory framework should also recognize that MUPPs have successfully operated as target benefit plans for several decades and any new framework should recognize existing features of MUPPs rather than impose any new requirements.
  2. If so, should a target benefit or a shared risk pension plan framework be developed? Yes. Please note that the shared risk pension plan framework is a misnomer. Under New Brunswick shared risk rules, it appears that the “sharing” is between active and retired participants, with the employer sharing little or none of the risks.. Further, this structure imposes rigid financial modeling into the funding requirements. We do not believe that such approaches are reasonable or appropriate as mandatory funding requirements for MUPPs.
  3. Should the new plan design be available to both single employer and multi-employer plans, and both private sector and public sector plans? MEBCO takes no position on single employer or public sector plan issues. For MUPPs, there is no need for a new plan design – the current model is successful.
  4. Should conversion to the new plan design be permitted for future benefit accruals only? MEBCO takes no position on single employer or public sector plan issues. For MUPPs, there is no need for a conversion – the current model is already a successful target benefit plan.
  5. If conversion of existing benefits is permitted, should union or member consent be required? MEBCO takes no position on single employer or public sector plan issues. For MUPPs, there is no need for a new plan design – the current model is successful.

Joining MEBCO

Five reasons why your MEBCO membership is critical
Your MEBCO membership guarantees that multi-employer plan interests will be considered whenever change is on the horizon. With your support, MEBCO will continue to be a strong and effective voice. Join today!
  1. The threat to multi-employer plans is real.
    The legislative framework is constantly changing, and cost-management and cost reduction are at the top of every agenda.
  2. Legislative changes can be significant.
    Recent proposed changes have threatened to offload costs onto plans, restrict plan coverage, and have compromised the viability of some plans
  3. Multi-employer plans are worth protecting.
    Multi-employer plans play a vital role in providing health services and retirement plans to over 1 million workers and their families in industries typified by small companies and a mobile work force.
  4. Multi-employer plans need a united lobby.
    Multi-employer plans carry a low profile due to the fact that the coverage is thinly spread over many employer groups and mobile workers.
  5. MEBCO is committed to protecting your interests.
    When governments propose changes, MEBCO is the single, clear voice at the table representing the unique interests of multi-employer plans.