The country’s finance ministers will be debating pension reform when they meet in Alberta next month. In advance of the meeting, Compas Inc. polled a group of Canadian CEOs for their thoughts about the topic, and an overwhelming majority argue that governments should reduce the public sector’s defined benefit pension plans.
Nearly 80% of the respondents believe public sector pension plans discriminate against the private sector in that all taxpayers are required to support them when those plans may be more generous than the ones received by private sector employees.
‘The pensions are now exorbitant and grossly unfair to the normal working Canadian,’ wrote one respondent. ‘It is part of the feeling of entitlement that is becoming pervasive in the public sector.’
Another panelist wrote that, ‘It is important that public sector employees be given two options — either reduce their benefits in line with the private sector, or raise their contributions.’
The federal government is also considering Bill C-501, which would force bankrupt companies to give priority to unfunded pension plan liabilities, ahead of creditors and bondholders. The CEOs were not overly supportive of the legislation.
Nearly two-thirds believe that if passed, the bill would discourage lenders from making loans to struggling companies, and roughly the same number believe the bill would encourage the phase-out of defined benefit plans altogether. Slightly less than half (47%) of the respondents believe Parliament should pass the bill.