THE STATE OF CANADA’S DEFINED BENEFIT PENSION PLAN

Elsie Henderson
Elizabeth Hicks
Rhonda Bursey
Mount Saint Vincent University

ABSTRACT

Defined benefit plans have long been viewed as the optimal pension plan because risks lie
mostly with the employer (Woodger, 2009). Over time, members have incurred, reduced or lost
pensions because of companies entering into bankruptcy (Chevreau, 2017; Eisen, MacDonald, &
Roberts, 2017). There is limited protection for members against such losses and this has led to a
focus on the need for better regulations to protect member pensions and consideration of a new type
of pension plan. This quantitative study explores the extent of the lost benefits in Canada, the current
state of “defined benefit plans” in Canada, the payment of dividends by companies with unfunded
pension liabilities, and company solvency position compared to its unfunded pension liabilities.
Keywords: Defined benefit, unfunded liabilities, company solvency, pension regulations