Protecting Pensions (ACER-CART President)

ARTA (Alberta Retired Teachers Association) invited me to bring greetings as ACER-CART president at their 2020 AGM held via Zoom in early October. 

It may come as a surprise, but you are all members of ACER-CART by virtue of your membership in ARTA.  Altogether, we have about 170,000 members across Canada.

Our purpose as a national body is to promote cooperation and assistance among our member associations.  We develop strategies for joint action on matters of common concern and we support public education.  You may recall the federal election issues brochure that we developed with like-minded organizations and distributed through provincial retiree associations like yours.  It was a non-partisan document that focused on seniors’ issues.

I became involved with ACER-CART because of my interest in protecting pensions.  I was a Trustee of the BC Teachers Pension Fund for 11 years and served 3 years as Chair of that Board.  Early on in that stint, I became aware of the threats to defined benefit pension plans.  If you were like me, we did not really think about pensions for most of our career.  Then, when retirement came closer, we really started to focus.

Defined Benefit pension plans are the most efficient and the most economical way to provide secure retirement income.  Contributions over a professional lifetime, professionally invested over the long term, provide strong returns.  Investment costs about ¼% of assets per year – compared to retail costs that might be 10 times that amount.  That makes a huge difference over the 60 or so years that most of us will contribute and receive our pensions.  Our actuary in BC tells us that 80% of the money we receive in pensions, on average, comes from investment returns – just 20% was from the contributions made by us and our employers’ contributions coming back to us.  That is cost-efficiency.

Now I can understand why big business might want to destroy Defined Benefit (DB) pension plans – their interest is driving down costs so they can maximize executive bonuses and profits.

It becomes more difficult to understand why governments want to eliminate DB plans.  People with pension plans pay taxes and support the local economy. People without pensions utilize government resources such as guaranteed income supplements and health care subsidies that come directly out of tax revenue each year.  How does that make sense?  Reducing costs now leads to increased costs in the future.  Governments, it appears, can neither resist the lobbying from the business sector nor can they resist getting their hands on the money found in pension plan assets.

All provincial Associations are watching, with concern, what is happening in Alberta with the transfer of your pension assets to AIMCO. I struggle to understand how that is supposed to be better for you pensioners.  And all of us across Canada realize that none of us are safe – our pension security could change at any moment with a signature on a new bill in any of our provinces.

Alberta members were a huge support on our national on-line petition opposing Target Benefit plans.  Target Benefit pension plans are designed to replace Defined Benefit plans by eliminating the pension promise and substituting a target.  That shifts the pension risk from the sponsor to the pensioner.  Whoa, sorry pensioners, we didn’t earn the target this year.   That means your pension will be reduced.

With the last election and the replacement of Bill Morneau as Finance Minister, the Target Benefit legislation has disappeared.  Will it come back?  I don’t know.  But I do expect that the federal government will be looking for ways to cut their costs given the astronomical debt they have run up in the COVID 19 situation.

Speaking of COVID, another priority for ACER CART this year was highlighted by the revelations of horrific conditions in seniors’ care homes and the tragic number of deaths in our age group.

As an Association, we have been advocating for a comprehensive National Seniors Health Care Strategy for several years.  We asked for a Minister for Seniors – we got that, but not much else.

We need a national universal pharmacare plan – 1 in 10 Canadians report skipping filling a prescription because of the cost of their medications.  Three-quarters of a million Canadians said that they reduced their food budget to afford their prescriptions.  In 2016, 374,000 people required additional medical services because they had not filled their prescriptions and that led to 300 unnecessary deaths.

Why do Canadians pay the second or third highest prices in the world for our pharmaceuticals and why are some drugs covered by provincial plans in Ontario that are not covered in Alberta?  The astounding thing is that even the federal government agrees that a national plan would save money – about $900 per person.

Horrific conditions in long-term care homes is not our only concern.  ACER-CART advocates for a system that would prioritize at-home care for seniors rather than in more expensive long-term care homes that need regulation and monitoring.  In BC only 3% of our seniors live in care homes – there are countless more seniors desperately in need of support and services so they can remain much more happily and healthily in their own homes.

We understand that health care is a provincial matter under our Constitution – not a Federal matter.  But don’t you agree that health care is everybody’s interest?

Our effectiveness depends on the engagement of our 170,000 members.