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CANADiANLAWyERMAG.CoM/iNhousE april 2014
organizations are looking at pension
de-risking and shared-risk models
designed to adapt to changing
economic circumstances.
A
decade ago, having a conversation about pensions was rather yawn-
inducing. Now, it's a political hot potato, up for much discussion and
debate — and reform.
These days, people are worried their pension plans are
underfunded, yet need to support retirees who are living much longer than anyone
anticipated 40 or 50 years ago. Add economic volatility and prolonged low interest
rates to the mix, and there's a valid concern there won't be enough money in the pot
to pay out pensions.
As a result, there's been a lot of talk about pension reform and, in particular, de-
risking strategies. These run the gamut from new plan designs that "share" the risk,
to transferring risk to insurance companies through annuity buy ins and buyouts.
"De-risking used to be called risk management," says Kathryn Bush, a partner
with Blake Cassels & Graydon LLP involved in pension and employee benefi ts law.
De-risking isn't a magic bullet, but it is putting pension reform in the spotlight and
forcing organizations to at least start looking at their options.
rescue
operation
BY vAwN HIMMELSBACH
operation
MATTHEW
BILLINGTON
