Concerns: What Is Taking Place with Teachers’ Pensions? —
In conversations with teachers during this election campaign a question that keeps coming up is what the government is up to with our pension plans.
Since 2016, Ontario’s auditor general Bonnie Lysyk, an officer of the Legislature, has been raising the alarm about the government’s accounting practices. In her pre-election review of its financial projections she noted that the government is forecasting revenues from the Ontario Teachers’ Pension Plan and insufficient pension expense for the Ontario Public Service Employees’ Union Pension Plan. The pension funds however do not constitute a “true asset” for the government according to Lysyk because it does not have the unilateral legal right to withdraw funds from the plans or reduce future minimum contributions to the plans without the express agreement of the plans’ joint sponsors.
The sponsors of the Ontario Teachers’ Pension Plan are the Ontario Teachers’ Federation (OTF) and the Ontario government. Each appoint five members to the plan’s Board and, together, they select the chair. Each Board member is appointed for a two-year term and can serve for up to four consecutive terms.
The OTF is overseen by a Board of Governors made up of 10 representatives of each of the provincial teachers’ unions in Ontario: Association des enseignantes et des enseignants franco-ontariens, Elementary Teachers’ Federation of Ontario, Ontario English Catholic Teachers’ Assocation and the Ontario Secondary School Teachers’ Federation.
The government is forecasting that it will receive $3.4 billion in revenues from the Ontario Teachers’ Pension Plan over the three-year period ending March 31, 2021. However, required payments by the government to match teachers’ contributions over the same period are forecast to be $5.3 billion. This is a nearly $2-billion difference! What is the government up to?
Lysyk goes on to note that after adjusting for the overstatement of revenue from the teachers’ pension plan and the understatement of expenses for the Ontario Public Service Pension Plan, Ontario’s annual deficit would be $11.7 billion for 2018/19 (or 75% more than the reported $6.7 billion), $12.2 billion for 2019/20 (or 85% more than the reported $6.6 billion) and $12.5 billion for 2020/21 (or 92% more than the reported $6.5 billion).
The NDP has based its platform and promises on the same accounting method regarding the two pension plans as the Liberals. The PCs have not have released a platform.
The government is padding its books with pension funds, which is not acceptable. Those funds are not the government’s to do with as it pleases. They belong to the workers. The government does not have the right to withdraw funds from our pensions or reduce its contributions to the fund without negotiating with our representatives. The auditor general has repeatedly asked that the government produce proof that it has the consent of the various public sector pension plan boards, on which it also sits, to account for claiming the funds as an asset under its control. No such proof has been provided.
Pensions are a right. The value teachers and other public sector workers produce is immense. A portion of the value produced by those actively working must be allocated towards ensuring that in retirement we can live at a Canadian standard of living and not in poverty. This value cannot be seized by governments to pay off debts they incurred to pay the rich. Instead governments have to recoup the value produced for society by those who provide public services and social programs so that these can be sustained and improved.
Workers have bitter experience with companies declaring bankruptcy and using the wild west of bankruptcy protection legislation to get away with the theft of their pension funds, leaving the workers to fight for whatever scraps are left over. Is a situation being set up that should Ontario declare bankruptcy at some point and bring in an emergency manager to run the province, our pensions would be used to pay off the banks who hold the provincial debt? It may seem far-fetched but that is exactly the type of thing that took place in the state of Michigan!
Whatever is going on, neither the current government nor any future one has our consent to take control of our pension funds. It is a serious matter that deserves everyone’s attention, as the silence from the main contenders for political power, one of whom will inherit the situation, suggests that something nefarious is afoot.