Thanks, Ross.
Our goal in appearing before you today is to share with you other options that can help this committee achieve its important goal, but without sacrificing that 9%, or about 1.2 million private sector workers in Canada, who are presently accruing defined benefit pensions.
The pension industry has evolved in the last many years. We have tools in our tool box to enhance pension security without resorting to a superpriority. In my experience, where pensions have been cut after an employer insolvency, the cause of the cut is not that there's not enough money to provide the pension; the cause is the way we wind up pension plans in Canada. We immediately buy annuities from an insurance company to replicate the pension benefit. Annuities are fully guaranteed, but they are backed by low-yielding assets, and are therefore expensive relative to other options.
In our materials, we outline solutions that parliamentarians could consider instead. They are based on real, recent examples of Canadian successes. An example is allowing for the appointment of a special pensions insolvency trustee to manage or merge pension assets and liabilities based in part on the Stelco model, where pensioners received 100% of their pension, notwithstanding a large windup deficit when the company filed for CCAA protection.
Other examples are asset pooling based on the great success of the model deployed in Quebec for members of insolvent company plans, or variable and advanced life annuities, new tools recently added to the Income Tax Act. These solutions do more with the dollars that are there than simply rush to buy an annuity and crystalize a deficit, and none would disadvantage the 9% of private sector employees still covered by a defined benefit pension plan in Canada.
If the committee is nevertheless committed to a superpriority approach, we've made a number of suggestions in our materials to lessen the blow this bill will levy against existing defined benefit plans, as well as a number of technical comments, which we are happy to speak to.