Company Pension Funds need to be in a Trust

[Legalist]

Is your pension safe? It may depend on what happens to your company - Business - CBC News

When contributions are made by an employee and employer, these funds should be placed in a trust account and the company should have no access to these funds. The Government of Canada should pass legislation to this end.
These funds, in a trust, should not be part of any bankruptcy proceeding or restructuring. They belong to the employees and pensioners of the company.

 

[Johnnny]

I'm about to start paying into a pension myself and they say it's protected. But I dunno

 

[Danbones]

Take a look at companies that have a similar set up see how things are going with them.
I know I have seen some people's lives really ruined by things going on with pensions.

 

[Johnnny]

I'm about to start paying into a pension myself and they say it's protected. But I dunno

Just checked and it is a defined pension plan

 

[Curious Cdn]

I'm about to start paying into a pension myself and they say it's protected. But I dunno

I know a Nortel pensioner...

... just sayin'

 

[Johnnny]

I'll probably still get ****ed anyways

 

[Danbones]

could be worse

that just depends on keeping them solvent till then

 

[tay]

Stelco......

 

[Legalist]

Just checked and it is a defined pension plan

A defined benefit plan provides members with a defined pension income when they retire. The formula used to determine a member's benefit usually involves factors such as years of membership in the pension plan and the member's salary, and is not dependent on the investment returns of the plan fund.
Source: CRA

This does not insure you will receive anything if the company misappropriates the funds/
What I suggest is having any pension funds placed in a trust outside of the company so that it would be impossible for the company to misappropriate for any reason and that the Government should legislate this.

 

[TenPenny]

I am far more comfortable with RRSPs where the company matches part of your contribution, that way, you're in control, and the company can't mess with your pension.

 

[taxslave]

Just checked and it is a defined pension plan

DEfined what? All pensions are defined. Good ones are defined benefit, not so good ones are defined contribution.

 

[Legalist]

I am far more comfortable with RRSPs where the company matches part of your contribution, that way, you're in control, and the company can't mess with your pension.

I would agree if you have extra funds to throw into a TFSA. e.g. Your contribution is 5% into the RSP matched by the company. You get a tax deduction but when you withdraw it is taxed.The next %5,500 should be put in a TFSA. While you lose the tax deduction on the short end, you pay no tax on the far end on the TFSA. Much depends on the income your income tax bracket. In other works extra RSP contributions should not be utilized by those in Bracket 1.
A defined pension plan will pay you benefits as long as you live whereas when you run out of RSP & TFSA funds, you then have no pension. Defined pension plan deductions provide a tax deduction on the near end but you pay tax upon retirement.

 

[taxslave]

The best thing is to have a pension plan, buy RRSPs and then use your tax return to buy TSFAs.

 

[Curious Cdn]

Stelco......

Sears ...

 

[TenPenny]

The list of companies that went belly up and stiffed pension plan members is long.


That's one of the ways Conrad Black built his empire, he screwed the pension plan of Dominion Stores.

 

[Hoid]

Is your pension safe? It may depend on what happens to your company - Business - CBC News

When contributions are made by an employee and employer, these funds should be placed in a trust account and the company should have no access to these funds. The Government of Canada should pass legislation to this end.
These funds, in a trust, should not be part of any bankruptcy proceeding or restructuring. They belong to the employees and pensioners of the company.

you mean they aren't in a trust? Ridiculous.

 

[MHz]

Considering the current trend is to part-time workers hired at as low a wage as possible an no benefits as the Gov does the heath and pension things anyway. Might as well make that the only pension and companies pay the employees out every payday and they can save it any way they like, Govt bonds for the RRSP's.

you mean they aren't in a trust? Ridiculous.

Most likely spread all around Wall St so somebody other than the pensioner get the bulk of the profits earned. Fiat banking rules would probably apply so they only need 1/10 available as cash.

 

[Curious Cdn]

you mean they aren't in a trust? Ridiculous.

"Trust" or not, the banks get the first crack at every nickel, in case you were wondering who REALLY run things.

 

[lone wolf]

Is your pension safe? It may depend on what happens to your company - Business - CBC News

When contributions are made by an employee and employer, these funds should be placed in a trust account and the company should have no access to these funds. The Government of Canada should pass legislation to this end.
These funds, in a trust, should not be part of any bankruptcy proceeding or restructuring. They belong to the employees and pensioners of the company.

Why would the Government of Canada pass legislation to any end that prevents pension funds from being slush funds? That would be like cutting off your own nose to spite your face to them....

 

[Murphy]

I wish legislation had been passed, so that private companies as well as government couldn't get their hands on any pension money.

When Jean Chretien was PM, the federal govt appropriated the military and RCMP pension fund, a private fund worth 34 billlion dollars, and put it into the government coffers. Not one penny of the RCMP and military pensions was supplemented, or in any way supported by the CDN taxpayer. It was a self sustaining, private fund that accumulated a surplus of 30.9 Billion.* The Chretien government dissolved the fund and took over collection of the pension.

Since, several federal governments have been skimming surpluses from several fund funds. Initially it was the Mil/RCMP, but since, the feds have taken money from other public sector funds.

The public sector unions and ret'd members of the military/RCMP attempted to have their money returned. The Supreme Court ruled that,

The unanimous high court ruled 9-0 that the government is not obliged to return funds to the public sector unions.

"The government was not under a fiduciary obligation to the plan members, nor was it unjustly enriched by the amortization and removal of the pension surpluses," Justice Marshall Rothstein writes for the court.

The complex 73-page ruling ends a long legal battle that dates back to the 1990s in which unions representing public servants, the RCMP and the military wanted the surplus money returned.

* https://beta.theglobeandmail.com/ne...e6554298/?ref=http://www.theglobeandmail.com&

I cannot speak about the public sector unions, but the Military/RCMP fund was 100% funded by contributions from members. According to mil/RCMP lawyers, and also noted in this article, the ruling was complex. The question that is still being asked is how the government can take surplus money from a private fund.

After the Chretien government took over the pension fund, had the ruling not gone in favour of the government, no money would have been returned to the military/RCMP. The plan was dissolved. All monies were being collected and directed by the feds. Who would they have returned the money to? Themselves?

Originally, before the federal government took it, some of the surplus was earmarked to increase the medical/dental coverage for pensioners.
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Most people have no input into how their pension fund is being managed. If you do, a trust (hopefully) keeps it out of the hands of the company or the government.