Pension relief sought

Market turmoil spells solvency deficiency
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 05/04/2009

The stock market is taking a beating and that spells bad news for employers when it comes to pensions. As the value of investments sink, many defined benefit (DB) pension plans are in deficit positions — and some employers may have to pump significant cash into them to keep them afloat, unless regulators step in to provide relief.

“For every single plan sponsor, the assets are down,” said Laura Samaroo, Vancouver-based retirement practice leader for Western Canada at Watson Wyatt Worldwide.

Telecom giant BCE, for example, said in its third-quarter report it may have to pay much more into its pension plans next year if the downturn in the capital markets continues to the end of 2008.