Saving the DB plan

Solvency rules can change, but employers need to give a little too
By Keith Ambachtsheer
|Canadian HR Reporter|Last Updated: 10/05/2009

Many private organizations that still offer defined benefit (DB) pension plans are concerned the current funding rules are too onerous and will lead to the companies that offer them being less competitive.

Seven major Canadian organizations voiced concerns to the federal government earlier this year and made recommendations to amend the Pension Benefits Standards Act (PBSA). The solvency rules, unless changed, would see these corporations pour an additional $2.5 billion of corporate cash into DB plans in 2009 and beyond — a financial burden they say they cannot bear.

In a joint submission, the CFOs of these organizations asked for meaningful, permanent changes to the solvency funding rules for DB plans, including that the government: