October 20, 2012 - No. 39

For a Pro-Social Pension Regime

DBRS Neo-Liberal Study of
Defined-Benefit Pension Plans

- K.C. Adams -

On August 17, the Dominion Bond Rating Service issued a press release and study entitled "Pension Plans: Discounting into the Danger Zone." The first half of the article by K.C. Adams entitled "DBRS Neo-Liberal Study of Defined-Benefit Pension Plans," was published in TML Weekly, September 22, 2012 - No. 35. Posted below is the second half, Parts 5 to 7.

Part 5
Defined Pension Benefits Under Constant Threat from
Capital-Centred Outlook and Aim

The capital-centred outlook considers pension benefits as liabilities. This obsolete outlook believes all claims on revenue other than enterprise profit are costs to those who own and control the enterprise.

Outlook is connected with aim, which for the capitalist system is to increase invested capital as much and as fast as possible. Any claim that drains revenue away from the growth of capital is considered a cost or liability and in violation of the aim. This includes revenue claimed by governments destined to fund defined-benefit pension plans for public employees or for use in any social program.

In opposition, the human-centred outlook considers pension benefits as necessary and legitimate claims on the value the working class creates through its work to transform raw material into use-value and provide services. This modern outlook considers workers' claims on the value they produce as a priority followed by claims to meet the general interests of society and reproduce the socialized economy. The aim connected with this outlook is to meet the needs of the working class and all others from birth to passing away and to humanize the natural and social environments. Any claim that drains revenue away from meeting the needs of the working class, general interests of society and reproduction of the socialized economy must be restricted. This includes private enterprise profit from non-financial enterprises, which should be held to a general rate of profit set annually according to a modern formula.

Private financial enterprises are inheritors of the anti-social tradition and practice of usury. All financial enterprises should operate as a public service providing a secure place for the people's savings and providing credit and insurance to the socialized economy without claiming any enterprise profit from the revenue they handle. Their claim should be restricted to wages for workers for the service they provide and to replace the transferred-value from the material workers consume in the course of fulfilling their duties.

Why Are Pension Plans and Funds Necessary When Pension Benefits
Are Claims on Added-Value in the Present?

Pension benefits generally are a claim on added-value in the present. Government guaranteed pension benefits for all should come out of general revenue collected from companies based on their gross income. In such a situation, government, company and individual pension plans would not be necessary. The government in practice would guarantee the right of Canadians to defined pension benefits at a standard of living they attained during their working lives with an established minimum.

Under current conditions, individual and company savings plans, if they are to survive, must claim added-value from investments in the present or the payout of benefits may completely deplete their principal.

The capital-centred outlook refuses to recognize defined pension benefits as a right and social program that necessitates a claim on revenue in the present collected by governments. This is because social claims drain revenue away from enterprise profit in contradiction with the capital-centred aim to grow capital as much and as quickly as possible. Owners of capital and their political representatives deprive the people of exercising their right to a social claim on revenue to sustain defined pension benefits for all in retirement.

Through its authority and control of the main sectors of the economy and political institutions, the capital-centred outlook and the private interests it represents interfere with pension claims in the present. It turns them into claims dependent mostly on savings from the past and the will of the authority in the present to guarantee those savings and the promised pension benefit. In practice, the state authority in many instances has refused to guarantee savings and the pension benefit. This is anti-social and a betrayal of the arrangement with the working class to guarantee its existence in retirement but such a thing does not stop the capital-centred outlook from enforcing its narrow interests in contradiction with the requirements of the socialized economy and its actual producers.

The capital-controlled economy is divided into privately-owned competing parts in contradiction with its socialized nature. Workers, often in conjunction with their employers and encouraged by government, are expected to set aside money for their retirement similar to an insurance fund. Contrary to this practice and expectation, retirement is not an emergency occurrence such as a natural disaster requiring funds or better still use-value to be set aside such as food or fuel. Retirement is a normal predictable process in the lifecycle of humans. Each individual of a generation goes through a lifecycle of childhood, maturity and retirement. During its mature period, the working class produces the necessities of life, provides services and reproduces the economy to sustain all humanity during the lifecycle from birth to passing away.

Under capitalism, workers exchange their capacity to work for a standard claim on the added-value they produce that must sustain them during the entire lifecycle from birth to passing away. Owners of capital cannot break this arrangement without calling into question the system itself and raising the necessity of replacing it with a pro-social alternative under the control of the actual producers in harmony with the modern economy's socialized nature.

Part 6
The Lifecycle Is Permanent While Companies Are Not

Benefits provided by individual and company pension funds are claims on added-value in the present when the benefits are paid. Mature workers in the present must produce the means of consumption for retired workers.

Individual and company pension plans come into contradiction with the reality of a socialized economy divided into competing privately-owned parts. Those competing privately-owned parts constantly come into being and pass away but the pension plans and funds connected with those privately-owned parts or invested in them are expected to provide pension benefits and claims on added-value into the future regardless of the disappearance of companies and subsequent loss of revenue and livelihoods and disruption to the plans.

Contrary to the assertion that certain monopolies are "too big to fail," all companies are impermanent and doomed eventually to fail or otherwise disappear. Company pension funds providing benefits in retirement to a working class continuously going through its lifecycle, comes into contradiction with the insecurity and impermanence of companies and their employed workers contributing to the pension plans.

To jump through this hoop of contradictions, capital-centred accounting has concocted a convoluted method to determine how large the defined-benefit pension fund must be in the present to guarantee the defined benefits to all members of a plan if it were immediately wound up for whatever reason. In addition to the uncertainty surrounding the fate of retirees, the wind-up of a plan leaves pre-retirement mature workers with only promised pension benefits accrued to that point in time and without an ongoing defined-benefit plan.

Capital-Centred Accounting Is Pragmatic

Capital-centred accounting can adjust its practice to suit a particular end. In this sense, it is open to fraudulent practices. The figures can be adjusted to meet an end required in the moment such as a political demand to show a bookkeeping deficit for a provincial or school board so that an excuse is concocted for an anti-social measure. It can fabricate a cover or diversion to avoid providing real economic problems with real solutions. During the Stelco 2004-06 bankruptcy fraud, even though the company was experiencing record quarterly profits, through the magic of capital-centred accounting the CEO continued to plead a liquidity crisis to put pressure on steelworkers and others for concessions and avoid facing up to the necessity for renewal of the Canadian steel industry as proposed by Local 1005 USW.

Capital-centred accounting is used to attack the rights of the working class and its pro-social agenda. Such accounting serves its master, the owners of capital and their political representatives, and sings whatever song the master demands.

In Delaware in 2001, the imperialist system of states in its present neo-liberal formation dominated by the U.S. organized the International Accounting Standards Board (IASB), as "the independent, accounting standard-setting body of the International Financial Reporting Standards." International Accounting Standard 19 (IAS19) deals specifically with defined-benefit pensions and other post-employment benefits.

The global accounting website Deloitte Touche Tohmatsu Limited explains in the following way the capital-centred practice behind IAS19, which it calls a "principle":

"The standard establishes the principle that the cost of providing employee benefits should be recognised in the period in which the benefit is earned by the employee, rather than when it is paid or payable."

The "principle," which reflects a capital-centred outlook, reveals a stark and dangerous contradiction for the working class. First, a pension with a standard defined benefit is not recognized as a right but a benefit "earned by the employee." This immediately puts the working class on the defensive with no guarantee of its right to a defined pension. The pension is "earned" and recognized in exchange for the capacity to work at the time of the exchange but not recognized "when it is paid or payable." IAS19 limits the exchange to the "period in which the benefit is earned."

The human-centred accounting principle recognizes that the exchange of workers' capacity to work for a claim on the added-value they produce is for a lifetime through the lifecycle of childhood, maturity and retirement regardless of circumstances. To limit recognition of workers' claims to "the period in which the benefit is earned" is anti-social and a sentence of insecurity not only in retirement but throughout the entire lifecycle.

Upon reaching retirement, how does a worker enforce the recognition of a benefit earned in the previous period? The working class is on tenterhooks as to whether its claim "recognised in the period in which the benefit is earned" will still be recognized "when it is payable."

Capital-centred accounting suggests that a claim for pension or other benefits in the future is not recognized as being the added-value produced by the working class when the benefit is to be paid but comes from added-value from the "period in which the benefit is earned." The "cost of providing employee benefits" or more properly the claim of the worker during retirement is not recognized as legitimately on the added-value available at the time but on added-value from a previous period when the claim was "earned." The IAS19 "principle" in practice accords owners of capital and their governments all kinds of wiggle room to betray the interests of workers and cheat them out of their "post employment benefits." It means that the claim of retired workers must come from a savings plan and not from a direct claim on added-value produced by workers at the time the benefit or claim is payable, a claim that only governments have the power to guarantee and enforce.

IAS19 obfuscates workers' right to defined pensions and turns the issue into a fight over value produced and recognized in the past, its size, availability, who has claim on it and whether it can be converted into added-value produced in the present. Often the issue is decided in a bankruptcy court leaving workers' rights in shambles and without a guarantee.

The IAS19 "principle" puts the onus on workers' savings plans (defined-benefit, defined-contribution or individual) to come up with enough value in the present to meet their benefits "earned" in the past and to protect those "earnings" from company disappearances, economic crises, inflation and the myriad tricks of capital-centred accounting. This "principle" in its application betrays the right of workers to security in retirement and lets governments off the hook from providing workers' rights with a guarantee. It betrays the modern principle that under capitalism workers exchange their capacity to work for a defined claim on added-value from the socialized economy throughout their lifecycle of childhood, maturity and retirement.

The anti-social accounting "principle" applied in practice brings it into accord with the capital-centred aim of growing capital as much and as fast as possible. IAS19 upholds the obsolete outlook that the claims of the actual producers for wages, benefits and pensions are "costs and liabilities" to the owners of capital that drain capital from their coffers. In this sense, the "principle" is not a principle at all but just another ordinary pragmatic anti-worker practice of capital-centred accounting to be fudged and manipulated according to the needs of capital in the moment.

International Accounting Standard 19 in Practice

The "principle" of IAS19 states, "The cost of providing employee benefits should be recognized in the period in which the benefit is earned by the employee, rather than when it is paid or payable." How does this "principle" work in practice when economic conditions are constantly in flux and companies come into being and go out of business all the time? The economic crisis of 2001 was barely overcome when the crisis of 2008 again wrapped everything in knots and became yet another excuse to attack defined-benefit pensions.

Company and individual savings funds exist in a nether world of fictitious capital. The only way this fictitious capital can be converted into added-value to guarantee the defined benefits of workers is through government authority. Many groups of workers have suffered the loss of their defined benefits for one reason or another with the excuse that the fund has suffered losses, the company has gone bankrupt, simply refuses to meet its obligations or some other anti-social reason.

U.S. Steel, soon after taking over Stelco, declared in practice that it does not recognize the pension obligations of the company it seized. It unilaterally eliminated the indexing of pension benefits of retirees and the defined benefit plans for new hires. These sorts of anti-social practices will continue as long as companies can act with impunity and governments refuse to hold them to account.

Government is the only institution with the capacity, scope, authority and consistency to solve this pension problem and guarantee the rights of workers. Government has the authority to claim enough added-value from the socialized economy in the present to meet the defined benefits of retired workers.

Bankruptcy protection has become a common method to deny workers their pension benefits and deprive them of their pension rights. Capital-centred accounting has concocted various methods, in the words of DBRS, to "measure the present value of future pension obligations." But the accounting obligation to "measure the present value of future pension obligations" is now used to negate the social responsibility to meet those pension obligations.

Companies refuse to put aside enough added-value measured in the present to meet future pension obligations. They complain that to do so violates their capital-centred outlook and aim, prompting them to unleash a campaign against defined-benefit pensions. They expect workers to put aside enough of their claims measured in the present to meet their claims in the future during retirement even when enormous downward pressure on wages is being put on the working class. The expectation that all workers can save enough to meet their own future pension obligations is bogus considering the capitalist system operates with a labour market that only functions with constant unemployment and general insecurity.

Owners of capital are short-sighted even with regard to their own system. One of the great boosts to the capitalist system was the development of public services and social programs such as public education and health care, unemployment insurance, pensions, workers' compensation etc. that allowed the working class to breathe a little easier and not desperately save their wages but spend them, which stimulated the circulation of goods and services and grew the modern economy.

On the issue of security of employment, the reality is that many workers, for example construction workers, change companies as a matter of course when a project is completed or their work capacity is no longer wanted. Workers are constantly being laid off from one company that may or may not have a defined-benefit or defined-contribution pension plan and begin work with another company that may or may not have such a plan or they may be forced to work as self-employed or in a marginalized position without any benefits. The "normal" turnover of employees is enormous according to Statistics Canada with millions of workers changing jobs every year. One and a half million workers are seeking employment at any one time; they are certainly not saving anything at that point towards their retirement. Besides the insecurity and threat of being laid-off, workers are also injured, suffer illnesses or are otherwise out of the workforce and not "earning benefits" or saving.

In spite of concessions forced on workers and the swirling economic uncertainty of recurring crises, workers are ordered to prepare a contingency fund large and stable enough to sustain them for however long they may live in retirement. According to this situation, workers during their retirement have no right to a guaranteed claim on added-value produced by the next mature generation of workers, and workers in the mature productive part of the lifecycle have no right to direct the government authority to claim enough added-value from enterprises active in the economy to meet the claims of the retired generation of the working class. The lifecycle of the working class is thus broken and becomes uncertain and dangerous.

Part 7
The Necessity to Renew the Pension Regime

Defend the defined-benefit pensions we have; fight for defined pension benefits for all!

The present pension system, including defined-benefit pension plans, is mired in an obsolete capital-centred outlook that views pensions as costs and liabilities. The capital-centred aim is to claim from the socialized economy the most private profit for owners of capital in the fastest possible time. This outlook views the claims of the actual producers on the value they produce and that of governments, as costs to owners of capital and in contradiction with private profit.

The modern human-centred outlook views pensions as a priority claim on the added-value workers produce and can in no way be considered a cost to the actual producers of wealth or the economy. The modern human-centred aim for the economy is to meet the needs of the actual producers from birth to passing away, fulfil the general interests of society and reproduce the socialized economy.

A defined-benefit pension plan and fund is set up with contributions from company or public revenue and the member employees. The rate of employee contributions varies from plan to plan and is under constant pressure to increase. Contributions generally have to continue for the life of the plan to meet retirees' defined benefits.

If the assumptions of accountants deem that a pension fund cannot cover all present and future retirees' benefits from the returns of its investments and regular contributions then the private company or public employer is required to contribute additional revenue to sustain the plan and its defined benefits. This accounting assumption is fraught with contradictions arising from its obsolete outlook that pension benefits are a cost to the owners of capital of a private company, the public treasury as contributor to the pension plan of a public institution, and economy. This outmoded outlook is opposed to the socialized nature of the economy and the necessity to guarantee the well-being of the actual producing class from birth to passing away, which includes guaranteeing the general interests of society and reproduction of the economy.

Capital-centred accounting assumes that all companies will eventually fail and defined-benefit pension plans will be at some point terminated or wound up. Under the hoax of austerity, many governments now also consider the pension plans of their public institutions and even government itself as subject to immediate failure.

The presumptions of failure for private and public enterprises and institutions are in contradiction with the necessity to guarantee the well-being of the working class from birth to passing away, the general interests of society and the reproduction of the socialized economy. The presumptions of failure trigger a series of accounting procedures that eventually calculate what Dominion Bond Rating Service (DBRS) calls a "solvency funded ratio [that] measures the financial health of a defined benefit pension plan by comparing the amount of assets to total pension liabilities in the event of a plan termination."

The "plan termination" can happen at any time so the capital-centred accountant must make predictions into the future to determine the ratio of "assets to total pension liabilities." A problem arises in that accounting predictions are based on present economic conditions. In capital-centred accounting for pension funds, the discount rate is the key in finding the "solvency funded ratio." The DBRS study gives the discount rate primary importance in determining solvency yet that discount rate, which predicts the needs of the plan in the future is based on today's rate and only assumes where the rate may be in following years.

Today, the discount rate, which "measures the present value of future pension obligations," is deemed very low mainly because of low interest rates. The low discount rate means higher pension obligations, which in turn are used to generate hysteria that defined-benefit pensions are no longer possible and in crisis.

This issue can be made more concrete by using the period 2000 to 2003 to show how capital-centred assumptions can be used to attack defined-benefit pensions. The 2001 "dot.com" stock market crisis and a low discount rate during that period resulted in higher pension obligations and a "solvency funded ratio in the danger zone" similar to today. Stelco management at the time (now controlled by U.S. Steel) used the negative solvency funded ratio to pressure steelworkers to give up their defined-benefit pension plan. Stelco workers resisted this attack on their right to defined pension benefits and viewed it as an attack on the rights of all to security in retirement. Stelco management then used the negative solvency funded ratio as a major reason to declare a "liquidity crisis" and apply for bankruptcy protection in early 2004. It used bankruptcy legislation (CCAA) and James Farley the Ontario Superior Court Judge in charge of the proceedings to pressure workers to make concessions and to eliminate small owners of Stelco stock equity. By the end of the first quarter of 2004, even while under bankruptcy protection, Stelco could no longer hide the reality that it was making record profits. Those elements of finance capital (led by Brookfield Asset Management) that seized control of Stelco under bankruptcy protection continued the farce with the aid of the courts until 2006, ending in a billion dollar big score for those in control, when the new shares they issued to themselves for very little soared in price after they put them on the public market in 2006, and again when they sold Stelco's assets to U.S. Steel in 2007.

DBRS writes of the period 2000-2003: "Pension analysis became an issue following the market correction between 2000 and 2003. Pension deficiencies during this period swelled for three key reasons: weak stock markets, falling interest rates and reduction in assumptions.... The assumed discount rate, which is based on interest rates, is critical in determining the obligation side of the pension balance sheet.... During this period, interest rates declined more than 75 basis points from 6.25% to 5.5%. This resulted in a massive increase in pension obligations based on actuarial assumptions using present-value calculations. As a result, during this period, companies reduced the assumed discount rate for pension obligations as well as the expected return rate on plan assets. These changes to assumptions have no impact on the asset side of the pension plan balance sheet but do have a dramatic impact on the obligation side and the income statement."

Stelco's CEO used the "dramatic impact on the obligation side" as an additional reason to make a big noise about a liquidity crisis while obscuring the fact that the steel economy was already turning positive and recovering from the 2001 economic crisis. Just one year later (2004), these "actuarial assumptions using present-value calculations" had to be revised "dramatically." DBRS writes, "This period (2004-2007) featured a dramatic improvement in the performance of equity markets, which caused funding shortfalls to decline and the pension status to return to surplus in 2007. The recovery had four major drivers: stronger stock market, higher employer contributions, stricter regulatory requirements and more conservative assumptions." Note that DBRS avoids saying anything about interest rates during this period, even though in its own words, "The assumed discount rate, which is based on interest rates, is critical in determining the obligation side of the pension balance sheet." In fact, interest rates declined in 2004 and rose only modestly into 2007 yet "funding shortfalls [declined] and the pension status [returned] to surplus in 2007." Perhaps an example of accounting pragmatism, using statistics in a way that suits a predetermined end (or legislative framework as the Ontario government likes to say).

The "conservative assumptions" continued into what DBRS calls, "The recovery period (2009-2010) ... characterized by a strong rebound in asset returns, high employer contributions and extremely low interest rates." "Extremely low interest rates" yet a positive outlook on defined-benefit plans according to DBRS until this year when the same rating agency says defined-benefit plans have suddenly entered the Chicken Little "danger zone" of "skyrocketing pension deficits, low interest rates, low discount rates and decreased returns on assets."

The arguments in the DBRS study and press release using handpicked statistics to suit a predetermined conclusion are designed to generate hysteria against defined-benefit pensions and destroy them as a social program. DBRS is grandstanding in opposition to the pro-social tide of history. They manipulate the data to suit an anti-social aim. The figures from one year or period to the next reveal how easy it is to manipulate the results to suit an anti-social aim or any predetermined framework. The upshot is that owners of monopoly capital and their political representatives refuse to meet their social responsibilities to guarantee defined pension benefits for those plans that exist and refuse to extend defined pension benefits to all Canadians.

Similar to the situation in 2004, the Workers' Opposition rejects this assault on the right of workers to defined pension benefits. The working class denounces the determination of the capital-centred outlook and aim to destroy defined-benefit pension plans. Defined-benefit plans represent the future and a pro-social alternative for all. The human-centred outlook considers defined pension benefits as necessary and a legitimate claim on the value the working class creates through its work. The human-centred aim contends that the people through their ingenuity and hard work can consciously organize the socialized economy to meet the needs of the working class and all others from birth to passing away and the general interests of society.

Part 8
DBRS Neo-Liberal Study of Defined-Benefit Pension

Defined-benefit pensions in contradiction with the capital-centred aim

The attack on defined pension benefits is part of the anti-social austerity agenda to pay the rich. Within that agenda, global monopolies and their government representatives consider they can break previous arrangements with the working class with impunity. This must not stand! Neo-liberalism and the anti-social austerity agenda to pay the rich are admissions of the failure of capitalism. These attacks are open challenges to the working class to organize to defend the rights of all, and to find and fight for arrangements that favour public right and interests, and forge a new direction for the economy.

Defined-benefit pensions for active workers guarantee a claim on added-value in the future during their retirement. For retired workers under the existing rules, a defined benefit is considered to have been measured and earned in the past and fully put aside in a guaranteed fund or at least that is the expectation and promise. The authority in power within corporations and public agencies has the responsibility to claim enough added-value in the present to meet the defined benefits of present and future retirees. As such, no matter what their drawbacks may be for the working class (the worst being that accountants must assume that all corporations will eventually fail forcing the wind-up of the pension fund) defined-benefit pensions represent a step forward, especially those with a government guarantee and those funded without decreasing the claims of workers while working. Defined-benefit pensions are a pro-social program connected with a human-centred aim in contradiction with the capital-centred aim. This puts them in the crosshairs of the neo-liberal anti-social offensive.

Capital-centred accounting is tied in knots trying to figure out how to determine a defined benefit in the future without contradicting the aim of capitalism. Most financial rating agencies and anti-worker economists now simply call for the elimination of defined-benefit pensions, other post-employment benefits and most social programs under the excuse that no alternative to austerity is possible without contradicting the capital-centred aim.

No matter how hard it tries, capital-centred accounting cannot square defined-benefit pensions with the aim to grow capital as much and as fast as possible. DBRS in its study declares that the dilemma cannot be overcome, as the accepted method to determine the size of pension funds to guard against the possibility of corporate failure requires too much revenue in the present especially in periods of low interest rates and during recurring economic crises. The necessity of high employer contributions, both public and private, contradicts the neo-liberal demand for working class concessions and to degrade public services and social programs so that revenue generally is transferred away from the people to the most privileged owners of capital.

DBRS says economic conditions change rapidly and recurring crises affect all enterprises with some sectors suffering more severely. The uncertain and changing economic conditions make imprecise any prediction of how large a defined-benefit pension fund should be in case of corporate collapse. Instead of addressing these problems and taking them up for solution in ways that favour the people in a human-centred way, DBRS uses them as weapons to propose doing away with defined-benefit pensions altogether and letting workers live with the insecurity of fending for themselves with individual and pooled savings plans knowing full well that such schemes provide no guarantee or security.

The same perverse logic governs the neo-liberal use of public deficits and debts as an excuse to attack workers' claims on the wealth they produce and to downsize public services and the people's social programs. Instead of addressing deficits, debts and recurring economic crises in a new way without capital-centred dogma, and taking up those problems for solution in a manner that favour the people, neo-liberals use them as weapons to push their anti-social austerity agenda to pay the rich, which makes the situation worse except for a privileged few.

According to the capital-centred line, workers, both working and retired, are "costs" and "liabilities" and the economy is certainly better off with less of those. This is one reason it holds such a cavalier attitude towards unemployment. DBRS contends dutifully that defined-benefit pensions are "costs" and retirees are "liabilities." To fund fully those pensions and retirees from available added-value in the present is in contradiction with the aim of the capitalist economy so they must be destroyed literally. To this end, it has joined the neo-liberal propaganda barrage, hysteria and war against defined pension benefits and their personification, retired workers.

Blinded by its obsolete outlook, it does not occur to those in control of DBRS that defined pension benefits can exist for all even under capitalism if the state manages the issue as a universal social program using its authority to claim added-value in the present from all enterprises according to their gross income not their number of retirees. This would require governments to restrict the capital-centred aim not conciliate with it.

A government universal defined-benefit pension program would even do away with DBRS' accounting headache. Defined pensions would be paid from general government revenue and not from pension plan funds. Consideration of individual corporate failure would not be necessary with regard to a universal plan. Public sharing of social responsibilities, similar to a universal health care system, to meet the retirement needs of all the people is a necessary step towards humanizing the social environment. Defined pension benefits at rates acceptable to the working class are very possible within the present capitalist reality given the level of productivity of the modern working class and economy but they require a restriction of the capital-centred aim and not conciliation with it.

Within the present conditions and in the absence of a universal defined benefit pension plan, an organized working class must hold governments to account to force companies to fulfil their social responsibilities to make whole existing defined-benefit plans according to the best predictions possible and to guarantee the plans' viability and security. If companies refuse or fail to meet their social responsibilities for whatever reason, such as winding up a plan without providing sufficient funds, refusing to create a defined-benefit pension plan when workers desire it or denying an existing plan to new hires, governments must then take measures to seize enough of their corporate assets to rectify the problem, including even the prospect of running those recalcitrant companies as public enterprises. Governments are duty-bound to hold to account owners of competing parts of the socialized economy to establish equilibrium on pensions based on the recognition of the rights of the working class.

For their part, workers and their organizations are determined to hold governments to account to defend the private and public defined-benefit plans that exist and extend defined pension benefits to all Canadians as a universal social program. The workers' opposition declares that the well-being of all through the lifecycle of childhood, maturity and retirement must be secured and guaranteed without exception. If owners of capital and their government representatives refuse to do so for whatever reason, they are in contempt of a necessary arrangement with the working class for the exchange of its capacity to work. A refusal is a call to the working class to deprive owners of capital and their government representatives of their authority to deprive workers of their right to security throughout the lifecycle in exchange for their capacity to work. A refusal is a call for the working class movement to bring into being equilibrium based on the recognition of workers' rights, and a new direction for the economy under a human-centred aim.

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