Flaherty seeks pension advice

This topic is of great interest to me personally, since I am an ex-employee of Nortel Networks. Fortunately, while I worked for Nortel I chose to contribute to my former Public Service Pension Plan, (possible due to a reciprocal agreement between Nortel and the feds), so my pension is unaffected. Still, I feel for the many employees who find themselves in this sad situation due to no fault of their own. It's time for the feds to pass legislation so others will never find themselves in this circumstance.

Read the following edited article from CBC News...
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CBC News

Finance Minister Jim Flaherty took his cross-country pension tour westward Monday, meeting with banking officials and citizens in Winnipeg to solicit opinions on Canada's retirement income system.

"All options are on the table," Flaherty told reporters before meetings Monday.

The issue of pension reform has gathered steam in recent months with the high-profile collapses of numerous private pension plans, such as that of Nortel Networks Corp. When the tech giant entered bankruptcy protection in 2009, various levels of government stepped in with hundreds of millions of dollars to help guarantee pensions.

Despite those efforts, thousands of Nortel retirees have been left in the lurch and have lobbied the federal and Ontario governments to fill the gap at the insolvent firm.

In December, Flaherty met with his provincial counterparts in Whitehorse to discuss ways of overhauling the system.

Some provinces favoured creating a second, complementary system to supplement the Canada Pension Plan, while others argued simply putting more money into the existing system is the wisest course. Others have argued that smaller, more targeted moves such as tax breaks and increases to RRSP and TFSA limits should be used.

In October, Flaherty tinkered with the rules governing pensions at Crown corporations, but the changes fell well short of the across-the-board overhaul that some people have sought.

On Friday, CAW president Ken Lewenza lobbied in favour of a proposal that would effectively double the amount paid out under the CPP by gradually increasing workers' contributions to the plan by about 58 per cent over seven years.

Many private-sector pension plans are significantly short of the funds needed to pay their promised benefits, because of weak investment returns and historically low interest rates. And many employers are behind on payments required to meet these funding deficiencies, as a large number of Canadians are due to retire in the coming decades.

General Motors currently has a pension shortfall in excess of $100 billion, while Air Canada, Stelco, Alcan, BCE, Bombardier and Canwest Global, which is currently restructuring, are among a handful of Canadian firms that have struggled to deal with underfunded pensions in recent years.

Read more: http://www.cbc.ca/money/story/2010/04/12/flaherty-pensions.html#ixzz0kvnr9A5z