I have received a number of questions about the future of our CBC Pension Plan in the event the Conservatives are elected and follow through with defunding the CBC. It is a difficult question to answer given that we really don’t know what “defund” practically means. There are various versions of the future of CBC – from maintaining French services, to possibly including those in remote communities and perhaps even English radio. Until we know exactly what the plan is, gauging its impact on our pension is challenging.
Nevertheless, I will focus on the main question. Is our plan safe? In other words can we expect to receive our promised pensions?
The simple answer to the question is that the CBC is liable for the obligations / liabilities of the pension. As well, CBC is a crown corporation that is considered an “agent of her majesty” and as such the debts and liabilities of CBC are considered an obligation of the Government of Canada. It should be noted that not all crown corporations are “agent” crown corporations (so some don’t have their debts backed by the government). The government of Canada has a AAA credit rating so the strength of this backing is pretty much as good as it gets. So, even if the Government shut CBC down entirely, it would still be on the hook for all obligations of the Corporation until they are full extinguished.
It should also be noted there are multiple layers of member benefit protection that exist long before the above guarantee would need to be accessed. First of all, there are the assets in the Plan that are conservatively invested and widely diversified across multiple asset classes. They are managed by a highly qualified team that has had a long-term track record of earning the target rate of return.
Second of all, there are large funding surpluses in the Plan (over $1 billion on the solvency funding ratio and over $2.5 billion on a going concern basis) that provide another layer of protection. Third, under the Pension Benefits Standards Act (PBSA), the CBC would be required to fund any shortfall in the Plan.
So, while there are no absolute guarantees in life, it’s fair to say that members objectively have a very high degree of benefit security.
Dan Oldfield, PNA President