CANADA - David Dodge, governor for the Bank of Canada, is in a position of significant conflict of interest, and his attack on pensioners and employees must be understood in this context, the Bank of Canada Pensioners Association (BCPA) has claimed.
In response to Dodge’s speech regarding Canada's pension shortfall, where he highlighted pensioners and judges as the principal source of pension plans’ under-funding, the BCPA issued a public release criticising the Bank of Canada governor.
According to the BCPA, Dodge did not disclose that there was currently a pending pension surplus class action involving BCPA members and the Bank itself.
“The BCPA believes that Dodge is in a position of significant conflict of interest and his attack on pensioners and employees, as well as the judiciary, must be understood in this context,” the association said.
In his remarks, Dodge suggested that if companies had greater access to pension surpluses, it would encourage more defined benefit plan coverage.
However, the BCPA said he neglected to mention the Bank of Canada had refused to fairly share a significant surplus with its own pensioners, who share these deficit risks together with the Bank.
“Yet at the same time, Dodge has no trouble accessing the very surpluses he states are inaccessible to companies, by taking annual employer pension contribution holidays,” the association said. “Indeed, the Bank has not made any employer contributions to the Bank of Canada Pension Plan since 1999. These holidays exclusively benefit employers while lowering the benefits security of remaining employee pensions.”
The BCPA also accused Dodge of trying to solve the country’s pension system problems on the backs of pensioners and employees.
The business community in Canada, it said, had enjoyed “an easy ride during good times” and now wanted to be bailed out. “While a stronger and more active pension regulator will assist in this respect, awarding all pension surpluses to employers without recognising the risks that employees take in the current system is simply wrong.”
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