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The Supportive Community Chapter for Faith Workers and their Families of

The United Church of Canada

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Standing inside the lantern room of the West Point Lighthouse Inn & Museum in Prince Edward Island this summer, Unifaith members watched the sun set over the Gulf of St. Lawrence. They thought of the endless ways that ministers reach out to people, never really knowing how far their light may shine. We appreciate all that you have done and are doing as you live out your ministry. 

Thank you from the Unifor Unifaith Community Chapter 

Opinion Piece …..

United Church (UC) and Targeted Benefit Pensions (TBP)

There is a legal definition of a TBP and a conceptual definition.  The UC is correct that legally they are not a TBP, but the distinctive feature of a TBP is that a benefit is no longer defined - it can be decreased - usually because the plan does not perform well.  The Ontario Pension Benefits Act (PBA) requires a collective agreement before a benefit is legally a target benefit.  

But the UC plan document allows a decrease in some benefits at will.  The defined benefit for some periods of service have been changed into a target, a target that can be lowered (benefits decreased) and with the last amendment (2011) the reason does not have to be that the plan did not perform well.

The UC has adopted the concept of a target benefit by giving itself the power to decrease part of the defined benefit under any circumstance.  That part of the defined benefit formula is now a target, it may be expressed as a defined benefit but it is subject to change.  However, it does not fit the current legal definition of a target benefit under the PBA because there is no collective agreement.

This is a fundamental shift in how the plan is funded.  The United Church is no longer responsible for funding 100% of deficits.  It can now lower the "target benefit" so that the funded ratio improves.  The United Church is still responsible for 100% of the deficit for those periods of service where the benefit has not been made a target.

So the UC Plan may not be a TBP but it does have part of their benefit that behaves like a target benefit.  If there was a legal definition of a Hybrid TBP, then UC Plan would fit that definition.

Dan Clark, Retired Pension Consultant

April 2018