Finance Minister Jim Flaherty introduced a new pension reform package Tuesday that will include greater protection for pensioners, but will affect only a small number of them.

Flaherty introduced the new measures prior to his appearance at a house finance committee meeting on Tuesday afternoon.

The package calls for a number of reforms, including increasing the amount that plans can be overfunded from 10 per cent to 25 per cent to protect them from becoming underfunded during times of recession.

It will also require companies who shut down plans to pay out all benefits they owe their workers, rather than cancelling the plans with deficits.

And companies will no longer be allowed to take a contribution holiday unless the plan has a funding cushion of five per cent.

The reforms are designed to address problems, including dramatic pension shortfalls, that arose when the worldwide financial crisis hit last fall. Experts have estimated that pensions have become underfunded to the tune of $50 billion.

"These reforms will provide enhanced benefit security for workers and retirees while allowing pension plan sponsors to better manage their funding obligations as part of their overall business operations," Flaherty said in a news release.

Most of the reforms, except for the overfunding rules, will only apply to the 12 per cent of private sector pension plans in federally regulated industries, such as airlines and telecommunication companies.

The reforms don't cover the majority of pension plans that fall under provincial jurisdiction, nor do they address what happens when a company declares bankruptcy.

Workers at Nortel Networks, whose pension plan falls under provincial jurisdiction, fear they will lose their pensions as the company goes through bankruptcy proceedings and sells off its assets.

An unnamed government official told The Canadian Press that Flaherty will discuss more comprehensive reforms at a December meeting with provincial finance ministers in Whitehorse.

"This is a step in the process, it's an important step but it's not a panacea," the official said.

With files from The Canadian Press