The latest attempt to wiggle out of pension obligations to make the news is by the Globe and Mail in contract negotiations with its 440 unionized workers. Workers have rejected the latest offer and have given their union leadership a mandate to strike.
Initially, the Globe and Mail wanted to move workers from a Defined Benefit (DB) pension plan to a Defined Contribution (DC) pension plan. Later they offered to allow current workers to remain in the DB plan (with higher contributions), but new workers would go into a DC plan.
If financial pressures continue to mount for the Globe and Mail, it seems likely that there will be more attempts in the future to modify pension plans to reduce costs.
There are many factors that go into how much DB and DC plans actually cost a company, but the bottom line is that if the company is saving money on its pension, then retired workers, on average, must be getting lower benefits.
All this can be upsetting news for the wave of baby boomers reaching retirement age, but these assaults on pensions will intensify in the coming years. This isn’t what I’d like to see happen; it is a prediction, but not a wish.