Daily News Alerts

To register for Benefits and Pensions Monitor's Daily News Alerts, click here

Could super-priority kill PBGF?

Jason Vary, president of Actuarial Solutions Inc., wonders if ‘Bill C-228 the?Pension Protection Act’?will kill off the Ontario Pension Benefits Guarantee Fund (PBGF). This fund protects members and beneficiaries of certain single employer defined benefit pension plans in the event of an employer's bankruptcy, paying up to $2,550 monthly. It is funded through assessments on plans. “Since the new act?will greatly enhance the security of the benefits provided by the DB pension plans that survive, there will be far less need for the protections provided by the PBGF. Hopefully the Ontario government is paying attention and will revisit the cost/benefit analysis of maintaining the PBGF,” he says. As well, pension funding reform across the country has also alleviated concerns about pension deficits. With interest rates going up and “okay” investment returns, the average plan today is “actually fairly well funded. So if a company goes bankrupt today, chances are that the plan actually has 100 cents on the dollar, if not a little bit of surplus,” he says. While he warns it’s generally reported that the new?super-priority act?won’t take effect for four years, “that’s not quite true. The four-year transition period only applies to DB pension plans that existed before April 27, 2023. The new law is fully effective for any new DB pension plans established on and after that date. “Admittedly, very few new DB plans are created these days, but it is possible,” he says.?

Super funds make mockery of net zero commitments

The Australian Securities & Investments Commission?has undertaken "both reactive and proactive surveillance in relation to greenwashing since publishing an information sheet in June 2022 on avoiding greenwashing when offering or promoting sustainability-related products. The announcement follows an environmental activist group report that the countries’ 30 biggest pension funds increased their investments in key coal, oil, and gas producers by 50% in 2022 despite the funds' long-term commitments to net zero carbon emissions. Brett Morgan, a Market Forces campaigner, says, "Super funds are making a mockery of their own commitments to net zero by buying up wholesale in companies expanding fossil fuels and letting them get away with trashing our climate." While some Australian funds have committed to achieve net zero carbon emissions in their investment portfolios by 2050, superannuation or retirement funds raised their investment to more than A$34 billion in companies most responsible for expanding fossil fuels use, Market Forces says. It estimated more than A$140 billion of Australians' retirement savings are invested in fossil fuel companies through the funds, which have more than 9% of members' share investments in these firms on average. Paula Glick, co-founder of Honeytree Investment Management in Toronto, ON, says this can send the wrong message to the investment community. “It's like they are saying, in the short term, we have to get this done so they’re doubling down,” she says.

For details on these stories, visit www.bpmmagazine.com

• Early treatment cuts rheumatoid arthritis treatment costs
• Actions speak louder than words in psychologically safe workplaces
• CAAT digital efforts honoured
• Longevity Dividend Examined