Pension changes and a small measure of hope

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By Francine Schutzman / President, Local 180 and OCSM Past President


I believe that all of you who are vested in the Musicians’ Pension Fund of Canada have received letters telling of you of changes in the Fund. I hope that you read those letters, since your pensions will be affected. The biggest change is that, starting January 1, 2013, 50 per cent of the contributions that are made by employers in your name will go toward funding your benefit, and 50 per cent will go toward supporting the cost of the benefit being accrued from January 1, 2013 onwards. The changes were made in order to comply with recent changes in provincial funding requirements.


I know that there has been a great deal of consternation over the changes. I hope that those of you who were interested were able to join the webinars devoted to explaining the changes. They were on January 28 (English) and January 29 (French). If you weren’t able to tune in, you may still view the webinars by going to the Fund’s website. There is a Q and A section there that might be helpful to you. And please keep in mind that, although we have experienced an unwelcome change now, the Fund is still an excellent one and represents a superior retirement savings vehicle for you in comparison to what RRSPs can deliver. Since the MPF Canada and RRSPs are two completely different types of retirement savings vehicle, the most meaningful way to compare these two types of plans is to compare the benefits at retirement. This comparison can be found on the Pension Fund website under the link called MPF Canada Background Information December 2012. It could also be pointed out that for benefits earned after 2012, it will take just over five years before the sum of monthly payments paid to you exceeds the sum of the contributions remitted. More importantly when you retire, the MPF Canada will pay you an income for as long as you live, whereas RRSP income can run dry even if its investments perform well, and much too prematurely if the investments do not perform well and/or you live longer than expected.

If you read the FAQs on the Fund’s website, you may take away a small measure of hope that the current situation with the 50/50 split might be improved with time. Let us all hope so and, please, if you have any questions about the changes, please don’t hesitate to contact the Fund directly.

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