- Defined benefit plans are deferred wages and should be afforded the same protection as other deferred wages, i.e. they should be fully protected.
- If pensions are given priority upon a future bankruptcy, the sponsor's borrowing costs would increase about 5 basis points - a negligible amount.
- There is at least one plan that has implemented a Pension Security Trust similar to what has been proposed by the Canadian Institute of Actuaries. Contributions to the Trust add to security of plan members but are refundable if it turns out they were not needed.
Tuesday, December 1, 2009
Pension priority in bankruptcy (2)
Further to my last blog, here's a few points raised by colleagues: