The Voice of Multi-Employer Plan Interests in Canada


October 5, 2010

Via Fax and Mail

The Honourable Dwight Duncan
Minister of Finance
7 Queen's Park Crescent, 7th floor
Toronto, ON M7A 1Y7

Dear Minister:

Re:Multi-Jurisdictional MEPPs
Our File No. 100755

We recently wrote to you on September 15, 2010 setting out MEBCO’s concerns pertaining to the Government’s Announcement on August 24, 2010 respecting steps to strengthen Ontario’s pension system.

Since September 15, 2010, we have come to understand that the Ministry is preparing to sign the CAPSA Proposed Agreement Regarding Multi-Jurisdictional Plans in the near future.We are very concerned that Agreement contains provisions adverse to multi-employer pension plans (MEPPs), especially in the context of Ontario's permanent solvency exemption for MEPPs.

We agree that the current situation concerning multi-jurisdictional pension plans is somewhat uncertain, and that the CAPSA Agreement would add some level of certainty to the situation.However, the CAPSA Agreement was negotiated amongst the various jurisdictions when no jurisdiction had any permanent solvency funding exemption for MEPPs.The CAPSA Agreement does not therefore deal adequately with multi-jurisdictional MEPPs.In fact, although the CAPSA Agreement would add certainty, that certainty will lead to the certain disadvantage of Ontario members.

Under the proposed CAPSA Agreement, Ontario MEPP members would rank at the bottom tier of protected benefits in any situation in which a multi-jurisdictional plan's assets are divided by jurisdiction.This disadvantage is particulary sharp in the context of a permanent solvency exemption in Ontario, and would be profoundly destabilizing to multi-jurisdictional MEPPs.We certainly do not believe that Ontario would have knowingly negotiated an agreement that would be to the detriment of Ontario members.

Accordingly, MEBCO strongly believes that the provisions of the Announcement and the provisions of the CAPSA Agreement need to be reviewed and reconsidered in the context of a permanent solvency funding exemption for MEPPs.That fix may be as simple as the implementation of the current ad hoc system which applies the funding rules of the major authority.

MEBCO therefore urges you to take steps to ensure that the CAPSA Agreement is not signed on behalf of Ontario until a full review and reconsideration is completed, which takes into consideration a permanent solvency funding exemption for MEPPs.If the CAPSA Agreement is signed by Ontario in its current form, this may lead to greater certainty, but greater certainty which will negatively impact Ontario members by requiring immediate plan splits and benefit reductions.

This is therefore a matter of the utmost seriousness to the hundreds of thousands of members of multi-jurisdictional MEPPs registered in Ontario.We have listed below a number of multi-jurisdictional MEPPs registered in Ontario, whose combined membership of 610,000 members would be extremely adversely affected by the Announcement and the current form of the CAPSA Agreement and who have specifically endorsed the submissions in this letter.

We would be pleased to meet with you at your earliest convenience to discuss this matter further.

Yours truly,

William D. Anderson
Multi-Employer Benefit Plan Council of Canada


* includes active, retired and deferred vested members


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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.