TORONTO - The Canadian Auto Workers union accused the Ontario government of abandoning its responsibility to retirees by allowing a provincial safety net for pension funds to go underfunded.

"To suggest that retirees will bear the brunt of something they have no control over is just unconscionable," CAW president Ken Lewenza told a news conference Thursday.

"I can't even suggest to you how furious we are as an organization to suggest that our retirees won't be treated with decency and respect during this crisis. What good is a pension guarantee fund if it's not there when you need it?"

On Wednesday, Ontario Premier Dalton McGuinty warned that the province's pension guarantee fund isn't even close to large enough to cover auto workers if General Motors (NYSE:GM) goes under.

Ontario's Pension Benefits Guarantee Fund provides pensioners with up to $1,000 a month in the event a pension plan fails to provide its full benefit, or any at all. It is funded by corporate contributions.

But in the past, the provincial government has found ways to top up the fund when it has been insufficient to meet demand, including when both farm equipment maker Massey Ferguson and Algoma Steel filed for bankruptcy during previous recessions.

McGuinty said Thursday that the fund currently has about $100 million and "comes nowhere near meeting any liabilities -- for example, for the auto sector alone, to say nothing of all the other sectors."

Experts warned in February that the fund was teetering on the edge of being wiped out and could fold if a large corporation were to go under.

CAW pension and benefits director Sym Gill estimated that if GM were to liquidate its assets and go out of business altogether, the provincial fund would be approximately $2 billion short.

Ontario Finance Minister Dwight Duncan said Thursday the government wasn't turning its back on pensioners, but warned the pension safety net has been underfunded for 30 years.

"What we need is an honest look at how we're going to fund it," Duncan said. "There has to be an adequate commitment on all sides for this."

Duncan defended proposed changes which would give the finance minister unilateral power to decide when to grant the fund money and make it illegal for the fund to run a deficit.

"It's designed to give us flexibility to respond, not only to the General Motors situation but others that may come along," Duncan said.

Opposition parties argued the changes will give the government an excuse to skirt its responsibilities.

"The government is setting a new parameter that says these funds won't go into deficit, which then gives them cover if in fact there's a need to draw on the funds and the funds aren't there," said NDP leader Andrea Horwath.

Tom Klassen, a pension expert with York University's school of public policy and administration, said retirees' pensions will be safe in the short term, even if GM files for bankruptcy protection.

"In the longer term, if as part of bankruptcy protection GM becomes a smaller company and isn't able at that point to pay pensions, then that becomes a problem," Klassen said.

He said the $100-million fund would be "burned up pretty quickly" if the tens of thousands of GM retirees in Ontario were forced to rely on it, especially if other, smaller companies are using it too.

Paul Forestell, retirement profession leader at financial advisory firm Mercer LLC, said the fund could turn out to be a political minefield for the government.

"If you're a corporation that's diligently paid premiums into it for the past 15 years and then when you call upon it, it doesn't pay, then that's a political problem for the government," Forestell said.

"GM probably is the largest contributor to the Pension Benefits Guarantee Fund over its history."

General Motors, which is weighing a bankruptcy protection filing as an option as it continues to work on its restructuring plans, was given a holiday on contributions to its own pension fund by the provincial government in the 1990s, back when it was widely considered "too big to fail."

CAW economist Jim Stanford said it's because of this contribution holiday that GM Canada's pension is so underfunded today -- as of November 2007, its shortfall was about $4.9 billion. He added that the company was asked to contribute extra to the Pension Benefits Guarantee Fund as part of the deal.

Len Harrison, the CAW's retired workers representative, said the situation is unjust.

"All the time General Motors was putting money into the (Pension Benefits Guarantee Fund), it was paying out people, it was paying out pensioners that needed help," Harrison said. "Then it gets to us and they say, 'Sorry, there's not enough money there, you're out of luck."'

And retired CAW members said they were worried about how they would continue to pay their bills if General Motors or Chrysler go bankrupt.

"It makes me very angry and helpless," said Bernie Heming, 70, who worked for GM for 33 years.

"Pension was important to me when I was 20 years old and now I'm 70 and it's not there."