“The defined benefit pension that you have earned up to the point of any changes to the plan CANNOT be changed and is payable monthly for your lifetime”
“Current pensioners will not be affected by any future changes”
These statements are currently true, but there are no guarantees that they will always be true. The Saskatchewan Pension Benefits Act is the source of the legal obligation that says that past DB pension promises cannot be later reduced. But this legislation can be changed. And similar legislation has been changing in very troubling ways in other provinces in recent years.
In 2012, the government of New Brunswick changed its Pension Benefits Act to give employers the option to convert their existing Defined Benefit plans (where benefits cannot be reduced) into Target Benefit plans (where benefits can be legally reduced). These conversions are permitted not only on a go-forward basis, but also on a retroactive basis for DB benefits that have already been promised. Essentially, the rewrite of the NB pension law allowed employers to legally walk away from the pension promises they had made to both active workers and retirees. Most of the public sector plans in the province have since been converted under this law.
The governments of Prince Edward Island and Quebec partially followed suit for certain public sector plans. The Trudeau federal Liberal government has tabled similar legislation for federally-regulated pensions. Manitoba and Nova Scotia are in the midst of consultations about whether to import these laws to their jurisdictions.
The Saskatchewan government could follow suit and pass similar changes to our province’s Pension Benefits Act. If they did so, the University would have the option of converting your already-earned promised pension into a promise-less “target” benefit. If that option is on the table for the University, we would need two things to stop them: 1) control over our pension plan, 2) a local membership that continues to be fully committed to preserving the DB plan (which would not be the case if either of the University proposals were accepted).
The University likely emphasizes the points above because they want members who are close to retirement to feel that their stakes in this fight are relatively low, since most of their pension is already “banked” and fully protected. If we accepted the University’s proposal to move into a DC plan, how would this member’s pension be protected if our provincial laws were changed? Why would a future membership fight to preserve the DB plan of retirees, when most active members never even participated in the plan?
Pensions in Canada are under attack, with even past promises being put on the table. We will need the next generation to fight to protect our pensions in retirement. As always, we are stronger together.