More Albertans losing their pension plans

More people also applying for emergency access to locked-in funds
|hrreporter.com|Last Updated: 02/01/2011

The number of Albertans losing their pension plans is increasing, as is the number of people facing financial hardship, according to a new report.

Thirty-seven pension plans, covering 6,847 people, were discontinued in Alberta from June 2009 to June 2010, according to a report from the Alberta Superintendent of Pensions.

During the same time period in 2007-08, 30 private pension plans were discontinued, affecting only 582 people.

Of the 37 discontinued plans, slightly more than one-half of affected members saw their plans merge with another plan. In most of the remaining cases, members didn't lose their accumulated funds but companies stopped offering pensions for various reason.

The reasons for the lost pension plans, according to the report, included: bankruptcy, dissolved companies, financial or administrative considerations, a switch to a group registered retirement savings plan.

In 2009-10, 1,321 members from four plans had their plans discontinued because of companies dissolving, compared to none two years previously.

Also, 316 people had their plans replaced by group RRSPs, compared to 132 people in 2007-08, and 204 members had their plans discontinued for financial-administrative reasons, compared to just three people two years previous.

As Alberta's population has grown, so has the overall number of members in pension plans, increasing nine per cent in two years to reach 234,290 in the most recent reporting period.

But the report found more Albertans are tapping into their retirement savings to cope with financial hardship. The number of people  applying to the superintendent to access emergency funds from locked-in accounts has more than doubled to 2,433 in 2009-10.

Also, the amount of money released nearly tripled to $24.7 million from 2007-08.

Reasons for the applications include low income (1,483 cases), mortgage foreclosure (107 cases) and rental eviction (77 cases).

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