Thursday, December 24, 2009

Letter to Canadian Prime Minister re Pension and Bankruptcy law reform

Prime Minister Stephen Harper
Office of the Prime Minister
80 Wellington Street
Ottawa K1A 0A2

Dear Prime Minister Harper,

I am writing to you again to request your assistance in formulating a better approach to the current pension and bankruptcy law in Canada. Whilst other countries such as the USA and the UK provide insurance protection to retirees who suffer the trauma of having their pension source dry up due to company bankruptcy, Canada provides no protection whatsoever. In fact the Canadian government appears to have a complete hands off approach, and stands by whilst bond holders and other creditors gather to take the lion’s share of the assets.

These other creditors have their own insurance schemes to protect them but retirees don’t have that luxury, and in fact the law reduces the amount of personal retirement insurance we can build by limiting contributions to RRSPs.

One way of protecting retiree pensions without incurring taxpayer expense is to provide them “secured creditor” status in the event of bankruptcy. That way the underfunded pension trust can be augmented before the unsecured creditors divide the remaining assets of a bankrupt company. Is that so unreasonable? Given the probability that the other creditors have insurance, or are in a much better state to absorb losses that they can claim tax benefits on, it seems the right course of action to me.

As a long term employee of Nortel (35 years), I have seen my retirement dreams wither as I face the prospect of losing a huge portion of my income. It is further exacerbated by the fact that the Canadian Government took no steps to help save this great company, or to protect the citizens who built it over the years, and who now depend on the promised pension for their livelihood.

You have an opportunity to help. Senator Pierrette Ringuette has introduced Bill S-245 - An Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities). It has had a first reading in the Senate. I urge you to support and pass this bill as quickly as possible, and to enact the bill retroactively to Jan 1st 2009.

This bill has no financial cost to the government, and it has huge support by the millions of current and potential retirees across the country. There will be no negative impact on the general public if this bill is enacted, and in fact your government will be looked upon favorably by the majority of Canadians for taking this step. Your party should gain popularity and votes as a result. This bill will also save tax payer money by reducing additional OAS because of lost income for some pensioners, and it will make directors of corporations more accountable.

Morally and ethically, this is the right thing to do. Pensioners have provided services to Canada during their working careers and it is only fitting that they have some security for their pensions. On this Christmas Eve, I hope the spirit will move you to act on our behalf.

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