Faltering pension plans could take toll on Yukon, federal treasuries

Over the next three years, the Yukon government will have to cough up more than $6.2 million to shore up deficits in territorial pension plans.

Over the next three years, the Yukon government will have to cough up more than $6.2 million to shore up deficits in territorial pension plans.

And it’s not alone.

Global financial instability and federal pension regulations could force waves of Canadian employers to pay millions into pension plans in order to counteract investment losses from falling market values.

These payouts could prompt nationwide bankruptcies, and slap taxpayers with massive tabs to cover the pension plans of government employees.

According to the Federal Pension Benefit Standards Act, Canadian pension plans are required to remain at solvency rates of 100 per cent. Simply put, if everyone covered by a plan were to retire tomorrow, there must be enough cash to cover their pensions.

If these solvency rates can’t be maintained, the difference must be covered by the employer.

All Yukon government employees are served by the federally run Public Service Pension Plan — putting the shortfall responsibilities in Ottawa’s court.

“For that plan, we don’t bear any risk because of the market fluctuations,” said Clarke Laprairie, the assistant deputy minister of finance.

On the other hand, Yukon College, the Territorial Court, the Yukon Hospital Corporation and territorial MLAs, all have their pensions guaranteed from Yukon coffers.

The Hospital Corporation’s pension plan has a $4,716,000 deficit, which the territorial government has agreed to cover over the next three years.

Yukon College has a seven-year government commitment of $4,140,000 in order to cover “increased pension costs.”

The MLAs’ plan has taken a hit, but is still in a surplus position, said Helen Fitzsimmons, a manager of finance and systems for the legislative assembly office.

The surplus is due largely to the decision not to take a “contribution holiday” — a time where contributions are held for a certain period of time as a result of a surplus in the plan, said Fitzsimmons.

“We went to a new manager, and we weren’t really sure how he was going to work so, just to be sure, we continued to contribute while other plans would not have,” she said.

Across Canada, large numbers of companies are lobbying federal regulators to reduce solvency demands on employee pension plans. Already cash-strapped by a plummeting market, they argue pension-plan contributions could be a linchpin for bankruptcy.

“There are companies that would absolutely fold if they had to make contributions based on the provisions of the legislation as they stand now,” said pension consultant Jeff Kissack in the October 29 Globe and Mail.

Contact Tristin Hopper at

tristinh@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Chief Medical Officer of Health Dr. Brendan Hanley announced two new cases of COVID-19 on May 11. (Crystal Schick/Yukon News file)
Two new cases of COVID-19 reported, one in the Yukon and one Outside

One person is self-isolating, the other will remain Outside until non-infectious

Courtesy/Yukon Protective Services Yukon Wildland Fire Management crews doing a prescribed burn at the Carcross Cut-Off in May 2020.
Prescribed burns planned near Whitehorse neighbourhoods to improve wildfire resistance

Manual fuel removal and the replacement of conifers with aspens is also ongoing.

Chloe Tatsumi dismounts the balance beam to cap her routine during the Yukon Championships at the Polarettes Gymnastics Club on May 1. (John Tonin/Yukon News)
Gymnasts vie in 2021 Yukon Championships

In a year without competition because of COVID-19, the Polarettes Gymnastics Club hosted its Yukon Championships.

Yukonomist Keith Halliday
Yukonomist: Yukon Budget 2.0

If the banks that finance the Yukon’s growing debt were the only… Continue reading

The deceased man, found in Lake LaBerge in 2016, had on three layers of clothing, Dakato work boots, and had a sheathed knife on his belt. Photo courtesy Yukon RCMP
RCMP, Coroner’s Office seek public assistance in identifying a deceased man

The Yukon RCMP Historical Case Unit and the Yukon Coroner’s Office are looking for public help to identify a man who was found dead in Lake LaBerge in May 2016.

Yukon Zinc’s Wolverine minesite has created a mess left to taxpayers to clean up, Lewis Rifkind argues. This file shot shows the mine in 2009. (John Thompson/Yukon News file)
Editorial: The cost of the Wolverine minesite

Lewis Rifkind Special to the News The price of a decent wolverine… Continue reading

Letters to the editor.
Today’s mailbox: border opening and Yukon Party texts

Dear Premier Sandy Silver and Dr Hanley, Once again I’m disheartened and… Continue reading

Fire chief Jason Everett (Crystal Schick/Yukon News file)
City launches emergency alert system

The city is calling on residents and visitors to register for Whitehorse Alert

Two young orienteers reach their first checkpoint near Shipyards Park during a Yukon Orienteering Association sprint race May 5. (John Tonin/Yukon News)
Orienteers were back in action for the season’s first race

The Yukon Orienteering Association began its 2021 season with a sprint race beginning at Shipyards.

Whitehorse City Hall (Yukon News file)
City news, briefly

A look at issues discussed by Whitehorse city council at its May 3 meeting and the upcoming 20-minute makeover.

Deputy Prime Minister Chrystia Freeland met with MP Larry Bagnell and representatives from the Tourism Industry Association via Zoom on May 4. (Facebook)
Deputy Prime Minister Chrystia Freeland met with MP Larry Bagnell and representatives from the Tourism Industry Association via Zoom on May 4. (Facebook)
Deputy Prime Minister talks tourism in “virtual visit” to the Yukon

Tourism operators discussed the budget with Freeland

Polarity Brewing is giving people extra incentive to get their COVID vaccine by offering a ‘free beer’ within 24 hours of their first shot. John Tonin/Yukon News
Polarity Brewing giving out ‘free’ beer with first COVID vaccination

Within 24 hours of receiving your first COVID-19 vaccine, Polarity Brewing will give you a beer.

Most Read