'Pensioners are our most vulnerable': Better protection needed for retirees, says advocate
After 27 years at Sears Canada, Gail Paul thought she was two years from retirement. Now, her future is uncertain and a portion of her pension is in danger.
If they got money for bonuses, they should have money either to put into our pension plan or to give the employees as severance- Gail Paul
She is one of thousands of former Sears employees who may lose at least 19 per cent of their pensions, while the company pays out a total of $6.5 million in bonuses to corporate executives.
"I don't think that's right at all. If they got money for bonuses, they should have money either to put into our pension plan or to give the employees as severance," Paul told The Current's Anna Maria Tremonti.
In the wake of Canada's most recent company shutdown, advocates for retirees are pushing for legislative change to protect pensioners in the case of employer bankruptcies.
Push for new laws protecting pensioners
Wanda Morris, vice-president of advocacy at the Canadian Association of Retired Persons, says Paul's story is far too common.
Morris' organization hopes to change bankruptcy legislation in a way that will give pensioners "super priority."
Pensioners are our most vulnerable- Wanda Morris, vice-president of advocacy at the Canadian Association of Retired Persons
"Instead of having that unsecured, unfunded pension debt at the back of the line, we put it at the front ... unfunded pensions are essentially just a deferred wages," she said.
"It's important that we protect the rights of bankers and bond holders, but pensioners are our most vulnerable and they should have first call on any assets of the company."
Morris says it's an issue with both federal and provincial jurisdiction "which is why we're asking for action on both fronts and the federal action really is the super priority to put pensioners first."
- Politicians, retirees push for new laws to protect pensioners
The Current contacted Sears Canada for a response, but no one was made available.
Are you sure you're going to get that money to a given age?- Professor Gilles LeVasseur
University of Ottawa business and law professor Gilles LeVasseur says what happened to Sears is a similar story to Canadian telecom giant Nortel's collapse. "There's mismanagement, and then suddenly we just pulled the plug."
"What happened with Sears Canada is that over the years they sold their properties. They made sure that they would actually transfer the actual assets cash value to the shareholders because it was an investors group that actually took over Sears," says LeVasseur.
"So there's not much left."
LeVasseur warns that most employees aren't aware that underfunded pensions are common.
"Are we properly funding these pension funds and how are the workers well informed of what is the status. If you ask the workers, 'Is your pension fund well-funded — is it secure? Are you sure you're going to get that money to a given age?" says LeVasseur.
"A lot of workers will say, well that's what I think, but they'll never be able to confirm that in truth."
Listen to the full conversation above.
This segment was produced by The Current's Samira Mohyeddin and Yamri Taddese.