In this post, we consider another myth – unions and
employees are opposed to target benefits.
First, as pointed out in an earlier post, unions have embraced
multi-employer pensions plans, which often provide target benefits,
for many years.
Second, although there are some unions or branches of unions
that have recently voiced opposition to legislative changes to
permit single employer TBPs, it appears that much of this
opposition is directed at legislation which permits the conversion
of past benefits to target benefits, as is permissible in New
Brunswick. On a plan conversion from defined benefit to shared risk
in New Brunswick, all accrued benefits are converted to base
benefits which are afforded a higher level of protection than
ancillary benefits, but which are, nevertheless, subject to the
shared risk rules.
Notwithstanding the opposition of some unions or union branches,
there can be some advantages to members if past benefits are
converted in conjunction with moving to a TBP. Of course, from the
employer's perspective conversion is preferable because it
includes legacy DB benefits within the scope of TBP risk management
and there would only be a single plan design to administer going
forward. From the affected member perspective, all benefits are
subject to prescribed risk management rules to help achieve
improved benefit security and address potential inter-generational
inequities. In addition, to the extent TBP conversion is linked to
joint sponsorship/governance, members participate in plan sponsor
and administration decisions through their selected
It is notable that the majority of the conversions from defined
benefit to shared risk in New Brunswick were done with the consent
and support of the applicable unions.
In our final post, we consider Myth #4: Defined Benefit Plans
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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