Subseries 8 - Pensions Task Force

1.2 m of textual records

In late November 1986 I was asked by the Department of Financial Institutions in Ontario to chair a working group or task force on inflation protection for employment pension plans (file 2). The topic was an important and difficult one. The government wanted to do something, but wasn’t sure what it should do. Hence the task force. The issue had been in the public arena for some time because inflation was high and pensioners were being hurt and at the same time pension funds had large surpluses, which many companies were claiming was theirs or at least should allow them to take pension holidays (file 3).

The other members of the task force were Syd Jackson, the chair and former president of Manulife, and Cliff Pilkey, the former head of the Ontario Federation of Labour (files 4 and 5). One of our first tasks was to get David Conklin as the research director. He helped develop the research themes (files 6 and 7). We had a suite of offices on Bloor Street (file 8). I hired two summer research assistants, Jeff Trossman from the University of Toronto and Dave Lametti from McGill (file 9). The task force met frequently for the next year (files 11 and 12). In February 1987, the Institute of Policy Analysis at the U of T organised a one-day workshop in which experts discussed the various issues (file 10). We listened. On March 30, 1987 I gave a keynote address to a large Insight conference on pensions in which, with the support of the task force, I outlined some of the issues we had identified (files 13-15).

In the spring, we advertised for submissions and in June and July, 1987, we held public hearings (files 16 and 17). There was also a research symposium for invited experts in July (file 18). In the fall, we started writing our report and held a retreat for three days in December at Westover Inn in St. Mary’s to try to finalise our ideas (files 19 and 20).

We were assisted by a great number of persons with expertise in the areas involved (box 2). A research advisory committee was established, consisting of Keith Ambachteer, Shiraz Bharmal, John Ilkiw, Don Lee, Jim Pesando, David Short, and Michael Wolfson (files 26-32). Some of these persons also did research papers for us, as did many other experts in various fields (files 33-46). In addition, we were aided by other knowledgeable persons, many of whom read drafts of our report (files 47-54).

We received submissions from a great number of organisations, firms, and individuals. Submissions that came to the government were redirected to us (files 55-68).

The progress of our work was closely followed by the press, particularly the financial press (files 69-83).

The various chapters of the report went through many drafts (box 98). The final chapter setting out our conclusions and recommendations went through at least 15 drafts (files 100-104). The drafts were commented on by our consultants and others (files 106-117). One of the background studies was a technical report on how pension funds would operate with various inflation protection formulas. Mercers took the primary responsibility for this work, but brought in other actuarial firms (file 118). Their work was eventually published as volume three of the background papers (file 135). Volumes one and two contain the consultants’ studies (files 133-34).

In the end, Cliff Pilkey expressed a minority position. Although he signed the report, he would have gone farther in a number of areas, particularly with respect to applying our formula retrospectively (file 119).

After the report was released in February 1988 (files 120-22), I gave a number of talks to various groups, including the Canadian Institute of Actuaries and the American Bar Association, that was meeting in Toronto that summer (files 123-127).

The government was interested in implementing our report (files 129-131). Legislation was introduced by Murray Elston, the minister of Financial Institutions in 1989 (file 131), but in the end nothing was done. Many of the ideas were, however, brought into effect through the collective bargaining process. Part of the reason that the impetus for change was lost was because the economy was starting to lose steam and employers said that any increased cost would cost jobs and might cause the abandonment of defined benefit plans. Moreover, inflation was starting to be lower and this decreased the necessity for change. As this is being written, inflation is very low--about 2 percent--and so it would be an ideal time to implement our report. But it is unlikely that anything will be done. No one is worried about the problem today. If inflation ever gets to high levels again, however, people will regret that the report was not implemented back in the 1980s or 90s.

The formula that we had suggested (75% of CPI - 1 % of that sum) was resurrected in the 1990s for a different purpose, that is, to use for public programs where some, but not full, inflation protection was thought to be desirable (file 132).

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