{"id":16558,"date":"2019-08-29T09:40:07","date_gmt":"2019-08-29T13:40:07","guid":{"rendered":"https:\/\/www.benefitscanada.com\/news\/canadas-largest-companies-could-eliminate-pension-deficits-report-134900"},"modified":"2019-08-29T09:40:07","modified_gmt":"2019-08-29T13:40:07","slug":"canadas-largest-companies-could-eliminate-pension-deficits-report","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2019\/08\/29\/canadas-largest-companies-could-eliminate-pension-deficits-report\/","title":{"rendered":"Canada\u2019s largest companies could eliminate pension deficits: report"},"content":{"rendered":"\n
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Alethea Spiridon<\/span> | August 29, 2019 <\/p>\n

Canada\u2019s largest publicly traded companies could have eliminated their defined benefit pension deficits five times over with the value of their shareholder payouts in 2017 alone, according to a new report by the Canadian Centre for Policy Alternatives.<\/p>\n

\u201cDespite the decline in DB plans, a third of Canada\u2019s biggest companies actually maintain a DB plan of some kind,\u201d says David Macdonald, a senior economist at the CCPA. \u201cHowever, over the period of the study, from 2011 to 2017, we\u2019ve seen a fairly large increase in the amount that these companies pay out to shareholders. But at the same time, we\u2019ve seen them maintain pension deficits that they could readily pay off.\u201d<\/p>\n

Read: Sears Canada pensioners going after 2013 dividend paid to shareholders<\/a><\/strong><\/p>\n

In 2011, S&P\/TSX companies with DB pensions paid twice as much to shareholders as it would have cost to eliminate their pension deficits. By 2017, payouts to shareholders reached $66 billion, more than five times the value of these companies\u2019 pension deficits, at $12 billion. <\/p>\n

\u201cSo they pay off, in 2017, five times more to shareholders, and then the total pension deficit, which isn\u2019t an ongoing deficit . . . will be in essence a one-time payment,\u201d says Macdonald. <\/p>\n

The report found the majority of the 10 companies with the largest pension deficits pay out more annually to shareholders than the value of a one-time payment to eliminate their pension liability. However, it noted that pension deficits have shrunk since 2011.<\/p>\n

Read: Pension deficits, dividend payments among topics in new government consultation<\/a><\/strong><\/p>\n

\u201cBroadly speaking, the pension funds are better funded today than they were in 2011,\u201d says Macdonald. \u201cDespite that, though, about two-thirds of companies with these DB plans appear to continuously keep them slightly underfunded instead of fully funding them, despite the fact that they appear to have the resources to do so given what they\u2019re paying out to shareholders.\u201d<\/p>\n

Canada\u2019s current pension legislation leaves it to companies to decide whether to eliminate their pension deficit, as long as they meet minimum funding obligations, the report concluded. \u201cIt\u2019s time for more co-ordinated pension regulation that considers firms\u2019 financial strength rather than simply focusing on the financial status of the pension plan.\u201d<\/p>\n

Read: <\/strong>A look at the landscape for pension solvency funding reform across Canada<\/strong><\/a><\/p>\n

Read the full article at BenefitsCanada.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Alethea Spiridon | August 29, 2019 Canada\u2019s largest publicly traded companies could have eliminated their defined benefit pension deficits five times over with the value of their shareholder payouts in 2017 alone, according to a new report by...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/16558"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=16558"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/16558\/revisions"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=16558"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=16558"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=16558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}