New multiplier benefits all plan participants
The workers of Koyo Bearings Canada in Bedford, Quebec have made an interesting decision involving their defined-benefit pension plan.
They were faced, as so many pension plan participants are, with an underfunded plan.
The previous benefit level for the plan had increased the monthly multiplier to $36, but only for service from March 2010. Past service before June 2008 attracted a benefit of $30 per month per year of service. The minimum pension benefit was just $5.00 per month per year for all years of service.
To reduce the financial stress on the plan, and to improve benefits for longer-service employees, the benefit of $30 per month per year was extended to all past service, but the benefit for future service was reduced to $30.50, increasing by 50¢ in each of the second and third years.
Ratification numbers were not published for either the City of Calgary’s inside workers (whose agreement was published last week) or outside workers (in this week’s issue), but there was not overwhelming support.
According to both local presidents, wage increases that did not match the raises in the Halcyon days of the oil boom are the cause. Eight and one-half per cent over three years was a tough sell after nine per cent over two years in the last agreement.
A recent large interest arbitration in the Ontario healthcare sector has continued the trend from the acute-care nurses’ award of using lump sums rather than the wage increases against which the government is campaigning.
The contract between the Ontario Hospital Assn. and OPSEU for 9,000 medical professionals will have a 2.75 per cent increase in the third year.
