The NDP has identified pension erosion as a major problem and one of its key issues in the upcoming provincial election at the recent NDP Vision for Dignity and Security in Retirement forum. Howard Hampton, leader of the NDP, said at the gathering that people’s pensions must be indexed to protect their long-term value, according to a news media release.
“A pension valued at $1,000 in 1992 would be worth only $778 today,” Hampton said in a statement. “Over a 20-year period, a non-indexed pension would result in a pensioner losing half the value of her pension benefit.”
The NDP says 83% of Ontario’s private-sector workers, who have pensions, have zero inflation protection. Additionally, 60% of the province’s workers are not covered by a workplace-based pension plan.
In releasing the NDP’s pension-reform policy paper, Hampton also argued that every working person covered by a defined benefit plan should have the right to share in its benefits from their first day on the job. According to pension reform advocate Gilles Bisson, representing the Timmins-James Bay district in the Provisional Parliament, the nature of employment has changed to a point where such proposals are necessary.
Bisson said in the NDP press statement that many workers now switch jobs more frequently or rely on contract work. These workers should be able to profit from pension benefits from day one, not two years later. Additionally, these benefits should be portable so that no earned benefits are lost when moving to another plan, Bisson argued.
Overall, the NDP released eight proposals in the party’s platform for pension reform in Ontario. Among its recommendations, the NDP is seeking to:
- implement partial, permanent inflation protection for defined benefit pension plans in Ontario
- implement full and immediate vesting from day one
- ensure a minimum level of plan member representation on all pension governing bodies
- codify Regulation 909, the “surplus sharing regulation,” into the body of the Pension Benefit Act
- immediately increase the maximum guaranteed benefit of CDN $1,000 under the Ontario Pension Benefits Guarantee Fund and ensure the fund is adequately capitalized and functioning as a true back-up fund for the pensions of Ontario.
The NDP discussion paper is posted online at www.abrighteridea.ca .