The Prime Minister’s Promise for Retaining Defined Benefit Plans

In the lead up to the Federal election, the then candidate for Prime Minister, Justin Trudeau, made a bold pledge that Defined Benefit Plans would not be converted to Target Benefit Plans.

This statement is according to a brief submitted by the National Association of Federal Retirees (May 25, 2017) to the Government on Bill C-27. A bill which intends to transform Crown corporations and Federally regulated institutions pension landscape into Target Benefit Plans. It also includes means to phase out Defined Benefit Plans into life annuities.

Trudeau asserted his position that Defined Benefit Plans would remain unchanged if a Liberal Government is elected in a letter to the National Association of Retirees dated July 23, 2015.

DBPs, which have already paid for by employees and pensioners, should not be retroactively be changed into TBPs. — Justin Trudeau

The full letter and its contents can be downloaded from the National Association of Federal Retirees website.

Prime Minister Trudeau would likely respond that DBPs are not being converted to TBPs under the proposed legislation of Bill C-27. Those people under a DBP would have their pension contributions converted into a life annuity. The TBP would be a new entity after the DBP has been paid out.

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