A number of FIs have contacted ACFO to ask questions about Bill C-27, An Act to amend the Pension Benefits Standards Act (1985), which would create a third category of pension plans in the federal jurisdiction.
These changes won’t affect the public service pension, which continues to be a defined benefit plan. ACFO would oppose any changes to the pension, and we can confirm that no such proposal has been made to the Pension Advisory Board.
There are also no changes proposed to the NAV Canada pension plan at this time.
It should also be noted, in general terms, that Bill C-27 may prove to bring needed clarity to the pension landscape. The Act as it exists now allows for both defined benefit and defined contribution plans. With a defined contribution plan, there is no guarantee regarding the amount of payouts. There is a wide range of volatility associated with this model. The hybrid model proposed in Bill-C27 could be an improvement over a 100% defined contribution plan.
ACFO is acutely aware of trends in the private sector and discussions in the public sector about the various options on the table. We are monitoring the file closely and, as always, are well prepared to defend our members’ interests should any threats materialize. To this point, though, none have.
If you have questions, please contact Scott Chamberlain (firstname.lastname@example.org).