NDP proposes pension insurance program

Posted on October 22, 2009 in Social Security Debates

TheGlobeandMail.com – News/Politics – NDP proposes pension insurance program: Layton suggests legislation to protect workers whose companies go belly up and increase support for low-income seniors
Published on Thursday, Oct. 22, 2009. Last updated on Thursday, Oct. 22, 2009.   Ottawa — The Canadian Press

NDP Leader Jack Layton is proposing a national pension insurance program to protect workers whose companies go bankrupt and leave retired employees in the lurch.

The self-sustaining program would be funded by employer contributions and guarantee pensioners $2,500 per month in the event their plan is wound up.

Mr. Layton says other countries, including the United States and the Netherlands, have similar programs that adopt so-called orphaned pension plans.

The NDP is also proposing an increase to the Guaranteed Income Supplement for low-income seniors – a measure that would cost the federal treasury about $700-million a year.

Mr. Layton called for the Conservative government to double the Canada Pension Plan benefit to $1817 a month from $908, which several seniors’ groups have been lobbying for in recent years.

The proposals come one day after retired employees of the bankrupt telecom giant Nortel held a demonstration on Parliament Hill.

When companies go under they are allowed to wind up their pension plans. There is an estimated $1.8-billion shortfall in the Nortel plan.

That could mean a drastic cut for the company’s pensioners if the pension plan is dissolved.  Employees are currently last in line as Nortel sells its assets.

They are calling for the government to intervene and reform the Bankruptcy Act, allowing them to become secured creditors. That would make them eligible for payment ahead of others who are owed money.

The federal government has so far rejected the plea, saying that Nortel’s pension plan is provincially-regulated and it’s up to the Ontario government to take action.

Industry Minister Tony Clement pointed to Quebec, which has offered to manage the Nortel pension plan for members there until asset values rebound.

Liberal Leader Michael Ignatieff told demonstrators he supports amending the Bankruptcy Act so the pensioners can get what is owing to them.

< http://www.theglobeandmail.com/news/politics/ndp-proposes-pension-insurance-program/article1334106/ >.

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