The drop in the stock markets has taken a heavy toll on many pension plans including the Canada Post Corporation Pension Plan (CPCPP). Since December 2007 the CPCPP has lost $2 billion as a result of investments in stock markets. This loss is not good news. However there are several reasons why the loss will not affect the pensions of urban and rural operations workers at Canada Post.

Defined Benefit: Postal workers have a “defined benefit” pension plan. This means that the amount of our pension is determined by the number of our years of pensionable service, our wage level and our age if we wish to take early pension. Our pension benefits are not impacted as a result of changes in the value of the overall pension fund.

CPC’s Obligation to Provide Funds: In the past CPC refused our demand for joint trusteeship and has always opposed providing CUPW with any meaningful say in investment decisions. Consequently the financial risk in providing the defined benefit pension plan is borne entirely by Canada Post. CPC will be required to deposit money into the pension fund to ensure it can fully meet its obligations. When there was a growing surplus in the plan CPC decided to suspend its current service contributions in order to recover previous special payments totaling $770 million. The Union suggested it was doing so too soon after a surplus was reported. Faced with the current financial losses of the Plan the Unions demanded that CPC immediately resume making the employer current service contributions. Management has agreed to do so effective November 1, 2008.

Public Ownership: Being fully owned by the federal government provides enormous protection for our pension. The CPC Act contains provisions which allow for the Corporation to borrow up to $500 million from the federal government. It also enables the government to subsidize any deficits incurred by CPC if necessary.

Exclusive Privilege: In order to generate the money necessary to make up for the recent stock market losses CPC will have to generate sufficient profits from its operations. Maintaining CPC’s exclusive privilege to handle letters is essential to ensure the Corporation has the necessary revenue.

Time for Rational Management: Making up the financial losses of the pension plan will not be easy, especially if we are facing an economic recession. This is not the time for management to be reckless. Instead of attacking UPCE members and provoking a strike CPC management should drop their proposals for rollbacks and get back to bargaining a decent contact. Instead of investing hundreds of millions of dollars into letter sequencing machines CPC management should agree to test the new equipment and work processes in one city and then decide whether of not to proceed. Instead of using the CPC Strategic Review to attack postal workers and CUPW, management should take action to defend the exclusive privilege and safeguard CPC’s revenues.