Existing plan continued; new hires’ plan in the air
An interest arbitrator may eventually decide the kind of pension in which new employees at Air Canada will be enrolled.
The future of the airline’s defined-benefit pension plan, which has been underfunded for years and a stumbling block at negotiations for as long, was a central contributor to the short walk-out by Canadian Auto Workers members in June. Legislation was introduced in Parliament to end that strike, but an agreement was reached before it could be passed.
With the exception of early retirement benefits, the plan for current employees will remain unchanged. The plan for new employees remains a subject of negotiation and in the very likely event that Air Canada and the CAW cannot come to an agreement, an arbitrator will decide.
While these negotiations only concern one bargaining unit, the same issues are being revisited with the ACPA, CUPE and the IAM in their talks with the airline. None want to lose their current pension plan, but, despite the tinkering with the CAW plan, the issue of underfunding has not yet been adequately addressed.
The former defined-benefit plan has been eliminated at Hood Packaging in East Angus, Quebec. The new plan has a guaranteed company contribution of 1.5 per cent and a maximum contribution, with matching of employee contributions, of 4.5 per cent (versus 2.9 per cent to the YMPE and 4.0 per cent over it in the old agreement).
In recognition of the loss of the plan, employees will receive 1.0 per cent on their wages in the first year and 0.5 per cent in the second and third, all compounded with the GWI.
One of this week’s arbitrations shows the value of a sincere apology. The grievor’s carelessness injured a fellow worker, but his contrition and long, discipline-free record tipped the balance.
