Bulletin no. : 2002-2005/73
Who's Watching Over Your Pension?
When the government set up the Canada Post Pension Plan, CUPW and other unions demanded the right to access information and have a voice in the administration of our pension plan. What we ended up with was a Pension Advisory Council that gave unions and retirees guaranteed seats along with management.
The Council has 16 positions. One side (8 positions) is reserved for the bargaining agents and CUPW has 4 of those 8 seats. The other side contains 5 management positions, one elected retiree position, one elected position for employees who do not have a bargaining agent and one position that is elected from among all plan members. The person currently elected to that seat has indicated he is retiring so there will be an election to replace him this year.
Any votes in the council must have the support of the majority of both sides. This is called a double majority.
The Council has the following responsibilities:
· Review administrative information
· Review investment reports
· Have input into communications to plan members including the content of the annual report.
· Make recommendations to the Pension Committee
Retirement Tidbit # 1
The "85 Formula" Myth: Did you know that there is no such thing as an "85 formula?" Many members believe that when they reach the combination of age and service that adds up to 85, they can take a penalty free pension. This is only true in one situation. Look on the back to find out which combination is the only legitimate one.
What Have We Learned?
We get administration reports from Towers Perrin, the company that provides services our sisters and brothers in UPCE used to provide when we were under the Superannuation Plan. The bargaining agents believe that we would receive better service if that work was contracted back in and delivered by people who have a vested interest in the plan.
We also receive information about the investment decisions that have been made. We never get information until the CPC Board of Directors (who also serve as the Pension Board) have been briefed, so the information is usually quite dated.
Your Plan at a Glance
(as of Sept 30/02)
· Assets -- $6,991,000,000 (nearly $7 billion)
· Approximate investment breakdown 60% equities, 30% Bonds & 10% cash
· 2400 Retirees of the plan
· 50,000 Contributing members
For example at our last meeting we got a list of the 1150 companies our funds were invested in through equities. Earlier, the union reps on the council raised our concern that over 40 million dollars had been invested in Talisman. We constantly promotes the belief that there should be a policy on ethical investment. In response, the council agreed to invite representatives of SHARE to our next meeting (June 18-19) to give a presentation. SHARE (Shareholder Action, Research & Education) is an organization, supported by the Labour Movement that monitors pension plan investments and helps pension plans use good social investment practices.
Our Pension Plan is the 6th largest in Canada. Like all pension plans it was affected by the disastrous showing of the stock market over the past year. The annual report will show that there was a loss of nearly 400 million dollars. This loss would have been significantly more if we had not benefited from the stable interest rate paid by the Treasury Board on the installment payments made between the last 2 years. The transfer of funds was completed on Sept 30 2002.
We are fortunate that our pension plan is a "defined benefit" plan. That means that the employer is obligated to contribute any shortfall in the plan to ensure that our benefit is protected.
Pensions and Negotiations
Members approved demands to gain control of our plan so that Canada Post management does not have unilateral power over our pension fund. It is clear that this money belongs to us and is really just deferred wages that we've agreed to collect when we retire. Because it belongs to us, we should have the ability to determine how it gets used.
Our demands also focus on making things fair for a large number of our members who are either currently a temporary employee or who worked as a temporary or part time employee for part of their service. Many members want to try and retire earlier, but for those who worked and were unable to contribute to the plan, it makes sense to let them have the same opportunities as others
Answer to Tidbit #1: The only real "85" combination is 30 years of service & age 55.
Calculating Your Pension
The Personalized statement will be sent out to each member in the spring. It is so important that each member check out the information to make sure it is accurate. The Pension Administration Centre has no real process in place to deal with disputed schedule information. If you were a part time employee for some of your service and you were scheduled to work more than 20 hours then you need to make sure that this is recognized or else you will lose out. Part time service is not based on the hours you worked but on the hours you were scheduled to work. If you wait until you are ready to retire before you try to correct the details, chances are that your proof (copies of work schedules) will no longer be available from the corporation. Don't wait - do it now!
The CUPW members of the Pension Advisory Council intend to produce bulletins to the membership after each meeting. To make these bulletins most effective, we would like you to tell us what kind of information you would find valuable.
We have agreement from the council that there will be at least 3 meetings each year. In conjunction with each meeting, an education session is scheduled.
Last fall the session dealt with the legal aspects of the plan and governance information. In January we evaluated the retirement education currently being provided by Canada Post and paid for by the pension plan. In June we will get a preview of the "individualized" retirement session that CPC wants to pilot. With each bit of information we receive, we become better equipped to assess the information that is provided on our pension plan so that all our interests are better protected.