The federal framework as defined by Bill C-27, as it has been presented so far, could enable the reduction of accrued defined-benefits and the elimination of defined-benefit liabilities – simply put, this may would enable employers with defined benefit plans to transition out of those plans in favour of target plans, with plan members’ consent. Details on the consent requirements are slim right now. The retirement income security of people who have already retired could be impacted.
Some provinces have already implemented target benefit plans. New Brunswick recently implemented them for their public sector; Quebec has made them available to some industries, such as the pulp and paper sector; and other provinces, such as Alberta, are moving towards them. Nova Scotia and Manitoba explored the idea as well, but Federal Retirees and the Canadian Coalition for Retirement Security pushed back.
Bill C-27’s move to target benefit plans was aimed at federally-regulated employers and Crown corporations — for now. If they are had been successful, the stage would have been set for significant pension reform in Canada, across all sectors and orders of government