Ontario’s Power Trip: Retirement deficit coming to your hydro bill

Ontario Power Generation tops the worst funded pension fund list and Hydro One isn’t far behind. Guess who is going to pay for them

Ontario’s Power Trip: Retirement deficit coming to your hydro bill | FP Comment | Financial Post:

As noted in a recent Barry Critchley article in the Financial Post, DBRS, the Canadian bond rating agency recently released a list of the top 20 “Worst and Best” funded Canadian Pension Plans and Ontario Power Generation (OPG) topped the worst list with a deficit of $3.3-billion) Pension fund deficits have fallen into ‘danger zone’ for first time in decade, DBRS warns – July 4). Coming in at 8th spot was Hydro One Inc. with a deficit of $1.5-billion.”
In total the two had a funding deficit of $4.8-billion and with a combined full time work force at the end of 2012 of 16,651 employees that equates to a liability of $288,000 for each employee. Over 35 years each employee would be obligated to contribute an additional $8,200 annually in order to ensure those retirement benefits are retained at their current levels if they were private sector companies—but they are not.
What both entities have done for many years is capitalize a large portion of their pension obligations. This is allowed by the Ontario Energy Board (OEB), meaning that ratepayers wind up picking up the pension deficits. In fact it is not unusual for both OPG and Hydro One to capitalize as much as 50% of their required pension contributions along with actual labour costs associated with their build-out of infrastructure. Those capital expenditures allow them to apply for a rate hike from the OEB and it eventually shows up on ratepayers electricity bills as either electricity or delivery costs.
Despite the unfunded liability of Hydro One’s pension obligation, the Province of Ontario has managed to secure huge dividend payments which in 2012 amounted to $370-million and represented 50% of their after-PILT (payment in lieu of taxes) income.

Continue reading at the Financial Post



I’m pretty sure that senior citizens who are living on OAS and CPP ONLY and have to pay their inflated and corrupt monthly Hydro Bills are totally “thrilled” to know that their payments are supporting grandiose pension plans for Hydro One and OPG employees!
Ontari …ari…ariooooo…………… a place to live and a place to grow!………………….NOT!

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