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Anyone want some cheap and easy votes this federal election?
Forget about promising millions of dollars to upgrade rail crossings in places like Lanigan, Swift Current, Tisdale, Wapella, Warman and Watrous in Saskatchewan — as important as that funding may be. (The Liberals promised that money as part of their pre-election spend-a-palooza last week.)
No, I’m talking about making a promise that’s a little closer to home with a block of voters that traditionally make their way to the polls.
A federal party should add pension law to their platform, in a big way — requiring companies to not only pay a living wage, but to have a locked-in responsibility for pensions.
It’s something that retirees of the former Sears retail empire are learning about the hard way. When Sears caved in, its pension fund was short $260 million that the company simply hadn’t deposited into the pension fund. A couple of weeks ago, that corporate behaviour came home to roost, as 18,000 pensioners had their pension cheques cut by 30 per cent.
Keep in mind that, as employees, pensioners had kept up with every one of their pension contributions. The company, meanwhile, even as it was failing, paid out huge multi-million-dollar dividends to executives, and didn’t live up to its side of the pension bargain.
And the truth is that Sears is not alone.
Last week, the Canadian Centre for Policy Alternatives released a report looking at 90 companies on the Toronto Stock Exchange’s Composite Index that have defined benefit pensions. Only a few actually had enough money in their pension funds to fully address their pension obligations. The 90 pension plans were underfunded by a combined total of $12 billion. (That’s because, right now, companies legally only have to maintain 85 per cent of the funds needed to deliver their pension obligations.)
Yet, at the same time, those companies managed to find $66 billion to pay out as dividends to shareholders.
You can understand their behaviour: why fully protect the future lives of your loyal employees if you don’t have to? As corporate leaders, you can use the money to make yourself look better to the stock market — and, since many corporate bosses have healthy stock option packages and holdings, they get to fill their own pockets with dividend cash at the same time.
Call me old fashioned — I think contracts, including employment contracts, should be honoured.
Forget the fact that, morally, failing to live up to a company’s pension obligations is as repugnant as refusing to repair safety features on heavy equipment to save a dollar or two — either way, you’re directly benefiting by someone else’s suffering.
But back to the election: hopefully, some enterprising political party will step in and say that a commitment to funding pensions at 100 per cent of the liabilities should be just as legally binding as paying full price on any contract you’ve signed. That pension fund cash should be paid up on time and held separately from the company involved.
The only justification a party would need would be to say they were ensuring that companies lived up to their own existing pension commitments.
Across the country, private business is fleeing from pension plans, and I suppose the argument could be made that this would simply exacerbate that flight. Call me old fashioned — I think contracts, including employment contracts, should be honoured.
The federal Liberals did introduce some minor changes in the last federal budget to help pensioners caught in that sort of vice. The changes didn’t go very far, in part because the government said it didn’t want to impede the ability of companies that get into financial trouble from being able to restructure.
Instead, I guess the government felt it was all right for companies to steal from the elderly.
Russell Wangersky’s column appears in 36 SaltWire newspapers and websites in Atlantic Canada. He can be reached at [email protected] — Twitter: @wangersky.
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