Bill C-27, the Act to Amend the Pension Benefits Standards Act, 1985, may seem like the kind of legislation that would only interest an actuary.

But for Fred Vettese, the chief actuary of Morneau Shepell, this legislation — which would allow for the establishment of target-benefit pension plans in federal and Crown corporation workplaces — is a kind of corporate Viagra.

For years, Vettese and his colleagues at Morneau Shepell have been the chief cheerleaders for these newfangled plans. They see them as a profitable business opportunity as companies desperately try to dump defined-benefit plans, and employees balk at the high risk and meagre returns of defined-contribution plans that are often their inevitable replacement.

Target benefit plans are supposed to hit the sweet spot in the middle, although they’re loved by no one apart from plan sponsors — private companies and governments. Employees and pensioners are scared stiff that the plans will leave them high and dry, allowing employers to slither out from under their promises of guaranteed pensions to employees. They fear the retirements they paid for through years of payroll deductions will evaporate, replaced by uncertain payouts determined by the vagaries of the stock market.

But that’s not the question here. The question is how much Morneau Shepell itself will benefit from these plans — and whether Bill Morneau was feathering his own nest when he sponsored Bill C-27 in Parliament last year while still owning a significant chunk of the family business.

Morneau Shepell, backing its former chairman, now says that target benefit plans are an irrelevant part of its business — a financial flyspeck. In a recent statement, it claimed that only a few employers have adopted the plans in provinces where they’re allowed and that C-27 would have no “material impact” on the company.

Oh, really? That’s quite the reversal for Morneau Shepell, which has spent much of the last five years touting the plans as the best thing to happen to retirement since Bismarck invented the idea in 19th century Germany.

Writing in 2012, Vettese called a target-benefit plan “the ideal retirement plan for the 21st century that neatly balances the interests of employers and employees.”

In another article, Vettese predicted that target-benefit plans “will be an important new plan design that may ultimately replace defined-benefit plans in both the private and public sectors.” That’s right: Morneau Shepell thought target plans might eventually replace most existing pension plans.

If companies running defined-benefit plans decide to switch to the complex target-benefit plans, Morneau Shepell stands to win — big time. Bill Morneau knew that when he sponsored the bill in the House of Commons. It doesn’t matter whether Morneau was motivated by greed — or was simply incompetent. If companies running defined-benefit plans decide to switch to the complex target-benefit plans, Morneau Shepell stands to win — big time. Bill Morneau knew that when he sponsored the bill in the House of Commons. It doesn’t matter whether Morneau was motivated by greed — or was simply incompetent.

That hardly sounds like it’s irrelevant to the company’s business, does it? When the Harper government first launched a consultation on the idea in 2014, Morneau praised it, calling it a “win-win for employees, labour, for management.”

For Morneau Shepell, which tends to take in about half of its revenue from pension and benefit consulting, target benefit plans are clearly a business of the future. They’ve been touting them for years and were key to the development of the first big target benefit experiment in 2012, which saw New Brunswick switch thousands of public sector employees to a target plan and urge other provinces to take the plunge.

Financial analysts have taken note. In June of 2014, the Globe and Mail reported that shares of Morneau Shepell were trading at all-time highs — in part because of its expertise in running new forms of pensions. The headline said it all: “Morneau Shepell stock: A way to play changing pensions landscape.”

“Continuing pension reforms across Canada are poised to benefit the company as pensions get more complex … more companies are relying on providers such as Morneau to design, develop and administer these plans,” the article stated.

When I wrote a piece about target benefit plans a couple of years ago — the New Brunswick plan in particular — I was told by a critic of the plan that Morneau Shepell was essential to its design and existence. The actuarial calculations were so complex, he said, that only Morneau Shepell understood them, guaranteeing them consulting business ad infinitum.

Unions and retired pensioners hate the plans, which basically absolve employers of the responsibility to guarantee pensions under traditional defined-benefit plans. All those billions of dollars in liabilities come off their books and, in place, the risk is shared between employers and employees.

But nobody guarantees anything. If investment returns are lousy, contributions can be raised. If that doesn’t work, benefits can be cut.

But that’s beside the point for Morneau Shepell. It designs and administers the plans. That’s how it makes its money. If companies running defined-benefit plans decide to switch to the complex target-benefit plans, it stands to win — big time.

Bill Morneau knew that when he sat around the table to approve the legislation and then stood up and sponsored it in the House of Commons. It was a clear conflict of interest. It doesn’t matter whether Morneau was motivated by greed — or was simply incompetent. Why the ethics commissioner didn’t call him on it immediately and tell him to sell his shares remains a mystery.

C-27 is now a damaged piece of legislation. It may be good public policy, or not. But it was presented for consideration in Parliament by a minister with a clear financial interest in its success.

Bill Morneau is tainted. Prime Minister Justin Trudeau may keep him on for a few more months, to make it appear as if he isn’t responding to the howling wolves of the opposition.

But by the spring, he has to go.

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