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NASA President Elizabeth Johannson - Why NASA Members Should Care About the CUPW Contract

NASA has a hugely diverse membership, but I feel confident stating that NASA members feel very strongly about maintaining their pension plan. Members of the Canadian Union of Postal Workers (CUPW) feel as we do, that their pensions are vitally important. The attacks on their pension plan are a key issue in their contract negotiations. And for us, if a large union like CUPW has their pension benefits reduced it will make it harder to defend our own pensions.

We are fortunate that eligible NASA members participate in the Alberta Public Service Pension Plan (PSPP) and during our new contract part-time NASA members will be able to enroll in the Pension Plan sooner.

The PSPP is a “defined benefit” plan. This means that what is paid out to participants in the Pension Plan is based on a promised amount of money definedat the outset and based on the rate the employee was paid while working. This is important to people when they are making their retirement plans. You know what amount the Pension Plan will be paying out to you and can feel secure about your retirement. The PSPP is also in very good shape financially. While there is an amount of unfunded liability on the books this is entirely due to the desire for a buffer in case the actuarial projections are off. There is enough money in the plan right now to fund the current projected payments.

CUPW currently has a defined benefit plan, but like many such plans it is under attack. Many employers have already moved to “defined contribution” pension plans and the management at Canada Post would like to do so as well, beginning with new workers at Canada Post.

In a defined contribution pension plan there is no security about what a person’s pension amount will be when they retire. The employer puts a set amount into the pension plan during your employment, but their obligation ends there. The pension plan will then pay out to pensioners an amount NOT based on their salary when they were working, but rather based on the return on investments of the funds in the plan. This puts pensioners at the mercy of the markets. If the markets crash then pension payments drop, and the employer has no obligation to assist the pension plan regardless of your many years of loyal service.

It is easy to see why employers would want to change from defined benefit to defined contribution pension plans. It limits their obligations to employees and makes increases to premiums less likely, regardless of the impacts of the markets on the plan’s assets. As an example, an employee with a defined benefit pension plan might make retirement plans expecting to have a combined income from their pension and CPP of 70% of their previous salary (actual amounts will vary based on length of service). With a defined benefit plan they know that they can count on their earned benefit amount of pension to be there for them no matter how long they live. If they had a defined contribution plan then their pension amount could be suddenly cut in half. Imagine that happening to you five years into your retirement!

The CUPW is currently facing an employer who is insisting that their new employees should face that uncertainty. By supporting CUPW workers in their fight to retain their defined benefit pension plan, for all Canada Post employees, we are supporting the principle that workers deserve to have a reliable pension that reflects their years of service to an employer and is not wholly dependent on market investments.

Although CUPW is standing strong on pension rights they are not calling for their workers to go out on strike at this time, the reality is the opposite; they are saying that their members are willing and prepared to continue working while their leaders continue to try to reach a deal at the bargaining table. It is Canada Post management who are preparing to lock out their workers in an attempt to starve them into accepting pension concessions and other roll backs. The Globe and Mail has reported Canada Post as having made a profit of almost $100 million in 2015; and while letter mail volumes are dropping, parcel delivery from online shopping is increasing substantially.

At a time when our federal and provincial governments are agreeing to expand the Canada Pension Plan in order to provide stability for seniors and reduce the number of seniors living in poverty, it is incongruous for the federal Liberal government to allow a large crown corporation to attack pension benefits for its workers. We encourage you to write to your MPs about your concern that pension rights be maintained.