Broken Promises

The crisis in the financial system led to a recession, an equity market meltdown and a collapse in long-term interest rates. The solvency position of pension plans collapsed at the very moment that plan sponsors faced real-world economic pressures that pulled them under. Active pension plan members...

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Bibliographic Details
Published in:Benefits Canada 2010-04, Vol.34 (4), p.53
Main Author: O'Reilly, Hugh
Format: Article
Language:English
Subjects:
Beneficiaries
Court decisions
Insolvency
Liability
Pension plans
Online Access:Get full text
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Summary:The crisis in the financial system led to a recession, an equity market meltdown and a collapse in long-term interest rates. The solvency position of pension plans collapsed at the very moment that plan sponsors faced real-world economic pressures that pulled them under. Active pension plan members and retirees soon found themselves in an unenviable position as unsecured creditors in an insolvency proceeding. Members and retirees should also take greater steps to protect themselves. They have the right to information, and they should avail themselves of that right to monitor the plan and raise questions of plan sponsors and regulators before an insolvency occurs. Understanding the situation and holding plan sponsors and regulators more accountable is likely the best defense available to them.
ISSN:0703-7732