Canadian Firms Whose Pension Plans Value Dipped Lobby For Longer Grace Period To Make Up Funding Deficit

October 30, 2008 12:12 p.m. EST

Toronto, Ontario (AHN) - Relief is underway for Canadian pension funds battered by the global market turmoil, Finance Minister Jim Flaherty hinted Wednesday.

Among the measures the federal government is considering are extending the period companies are given to make up funding deficits in their pension plans by up to five years. Some large Canadian firms are lobbying for a longer grace period of up to 10 to 15 years.

Two years ago the federal government had initiated measures to assist pension funds, but the relief had already expired. The new measures are in response to a lobby from Canadian firms after the markets tumbled in fall, which led to a substantial decline of pension fund assets value.

According to pension consultants Mercer Human Resource Consulting, the value of 125 company pensions it monitors has gone down by $10 billion by late September, but it could have worsened following the 31 percent loss of the value of Toronto's S&P's/TSX composite index since January.