Currently as CUPW members who work at Canada Post we have a defined benefit pension plan.
WHAT IS A DEFINED BENEFIT PENSION PLAN?
A defined benefit (DB) pension plan is a plan in which the monthly retirement pension is determined by a set formula, rather than depending on investment returns or the health of the plan. The formula for the Canada Post Pension Plan is determined by our years of service and our earnings in the best five years of consecutive service. For part-time and RSMC workers, years of service are seen as a ratio of full-time hours.
Defined Benefit pension plans provide the most retirement security. A person will know exactly what amount of money she/he will receive upon retirement. Currently, under existing federal legislation, employers cannot change existing defined benefit pension plans to other types of pension plans.
WHAT IS A TARGET BENEFIT PLAN?
So what is a target benefit plan? A target benefit pension plan is what we call a shared-risk pension plan. The employer puts money in it, but there is no obligation to fund any pension shortfall; the entire burden is on the existing workers and retirees. And the amount of money a retiree would receive is not guaranteed, it is a moving target depending on the market and investment returns.
In April 2014, the Federal Government signalled that they want to change this legislation. They want to be able to amend the legislation to allow for employers to change defined benefit pension plans into target benefit pension plans in the federal sector (this includes Canada Post). They issued a call for responses to this proposal. We suspect legislation will be introduced in Parliament.
WE ARE AGAINST TARGET BENEFIT PENSION PLANS: SIGN THE PETITION
Canada Post replied to the call for submissions. In their response they spoke very favourably about the need for Target Benefit Pension plans, and how their current Defined Benefit Pension plan places too much financial burden on them.
CUPW also replied to this call, and opposed any change from Defined Benefit Pension plans to Target Benefit Pension plans.
There have been demonstrations in Toronto and Saint John New Brunswick opposing any change from Defined Benefit to Target Benefit Pension plans. Your Local has also received a petition on this issue. Please sign it. And we encourage every local to establish a Pension and Retiree Benefits Committee.In solidarity,