The Supreme Court of Canada delivered a long-awaited decision on private-sector pension plans this month, and a group of business leaders offered their views in a web poll conducted by COMPAS Inc.
The country’s top court ruled in favour of food manufacturer Kerry (Canada) Inc. after it had been using some of the surplus funds from its defined benefit plan to pay into a defined contribution plan set up for new employees. Workers in the defined benefit plan sued unsuccessfully.
The 108 respondents to the poll were asked for their general views on the issue, not specifically about Kerry. Most of the respondents believe that an employer should be allowed to stop making contributions to a defined benefits plan when it has enough money to meet its obligations. A very slim majority (51%) believes an employer is justified in using excess funds from a defined benefit plan to help pay the administrative costs of an associated defined contribution plan.
A few of the CEOs argued individuals should have more responsibility over their plans. “Defined benefit pensions should never have been allowed,” wrote on respondent. “All pensioners should be allowed within narrow parameters to control investing decisions on their own pension funds.”
The poll also asked about the perceived inequality between generous public-sector pensions and their private and non-profit counterparts. Many were not happy about the situation, and argued public-sector pensions should be scaled back. “Government employees are paid by our dollars and therefore should be equal to the private sector,” according to one CEO.
Others contend nothing at all should be done. “The public sector often pays less than the private sector for similar jobs, so if someone sticks it out long enough to get a pension in the public sector, they probably have earned it.” Another respondent echoed this sentiment. “If we want talented, highly qualified people to take these jobs, we need to respect them and pay them what they’re worth,” the CEO wrote of public sector employees. “There must also be compensation for the unfair, unfounded and gratuitous public vilification they must endure.”
At least one CEO suggested a solution for anyone who perceives the situation as unfair: “Get a government job.”