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Labor & Employment Law

: Thoughts from a Management Lawyer

Is there a legal obligation to protect pensions?

By Michael Fitzgibbon

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Yes, according to the Canadian Auto Workers union and they aren't at all impressed by

the Ontario government's announcement that they would not allow the Pension Benefits Guarantee Fund to operate at a deficit. The Fund provides pensioners with up to $1,000 a month in the event a pension plan fails to provide its full benefit, or any at all. The answer is not at all clear as this Reuters article demonstrates.

According to CAW president Ken Lawenza in a Financial Post article:

"This is not just an issue for autoworkers. It's an issue for all workers in Ontario who toil their whole working lives in hopes of enjoying a decent retirement," Mr. Lewenza added. "Government has an absolute responsibility to protect retirees from the worst effects of the financial meltdown, and the irresponsible actions of their employers."

The CBC reports that "The autoworkers said the province allowed GM's pension plan to carry on underfunded since the early 1990s" and the Fund is insufficient to cover the shortfall in the event that the worst happens. The Canadian Press writes that Ontario says it's not turning its back on pensioners amid CAW accusations.

Full post as published by Thoughts from a Management Lawyer on April 10, 2009 (boomark / email).