CAW takes pension reform to Ottawa

June 30, 2010 at 1:30 PM

On Monday June 28th, CAW Local 2002 President Leslie Dias traveled to Ottawa to speak on behalf of the Airline Union at the Standing Senate Committee on National Finance. She was joined by Captain Craig Blandford from ACPA who is the Chairperson of the Pilots Pension Committee.

This was the 13th meeting of the committee with regards to Bill C 9 – the 2010 Budget Implementation Act, and was chaired by Senator Irving Gerstein (Deputy Chair). During the previous 12 meetings the committee heard from the Minister of Finance as well as departmental officials who explained the provisions of each of the 24 parts of this bill. Monday’s meeting dealt with part 9 of the Bill which pertains to the Pension Benefits Standards Act – an issue that the CAW has been focusing in on very closely.

Pensions are extremely important to our members and the CAW has shown time and again that it will fight to keep our defined benefit pension plans topped up. As you all know, pension reform has been tabled and discussed by many groups (including our own federal government) which clearly points to a shortfall in the system. The current structure and administering of workplace pensions is currently being reformed.

Federal and provincial governments are now paying attention to the fact that Canadians are poorly prepared for retirement. At the June meeting in PEI, the Finance Ministers agreed to look at options to enhance the CPP and improve retirement savings plans – which our union applauds.

But, part of the reason that Canadians are ill-prepared for retirement is that their employer does not provide a pension plan or the plan is inadequate. And, the situation is likely to worsen.

Employers who do provide defined benefit pension plans, want out, and with low interest rates and an aging workforce, defined benefit pensions are undoubtedly expensive. In addition, the rapid swings in interest rates can make funding defined benefit plans erratic.

As a union, we believe the employer is in a better position to withstand the risks of pension funding than the hourly wage earners that we represent. However, we note the reasons why employers want out of defined benefit pension plans, and we understand that the Finance Department is proposing reforms to the pension legislation in order to address the concerns of employers. The Finance Department is seeking to balance the employer’s call for funding relief on pensions against the need of plan members for a secure benefit.

Overall, our union believes that the reforms in Bill C-9 are balanced, although we are disappointed that there are no provisions for a pension benefit guarantee fund. However, for plan members, there are improved benefits and some provisions to secure funding such as restrictions on contribution holidays. We also applaud the provisions to give greater authority to the Superintendent as we see the regulator as being in a good position to act in the interest of plan members.

Pension reforms may give unions some support in defending defined benefit plans where we have them. Unfortunately, the reforms may not deal with the problem of inadequate pension plan coverage. Too many employers with defined benefit plans will still want to convert to defined contribution plans; those employers without defined benefit plans are unlikely to be enticed to start up such plans. For this reason, the CAW has been active in the Canadian Labour Congress campaign to double the Canada Pension Plan benefit – a securely-funded, defined benefit pension plan that covers all workers.

For additional pension information, please visit the Canadian Labour Congress at www.canadianlabour.ca.

  

  

For further information, please contact:
Leslie Dias, President, CAW Airline Local 2002