Bombardier pension plan changes irk Thunder Bay workers
CBC News has obtained an internal document outlining Bombardier's offer to its Unifor-represented workers before talks broke down.
It says the company wants to change its pension plan to a defined contribution plan.
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The change would mean retirement savings would fluctuate based on the market, and the employer would not be responsible for ensuring employees receive a pre-determined amount of money upon retirement.
Unifor national staff representative Andy Savela, based in Thunder Bay, said that's a huge problem.
"A person doesn't have a guaranteed income and there's less onus on the company to fund the pension plan and make sure that people leave with an agreed-to, negotiated monthly living allowance when they retire from the plant."
The Bombardier document notes the company has made significant contributions to the pension plan over the last 10 years. It also says the introduction of the new plan is consistent with other Bombardier plants and that the company is "not willing to take additional risks."
But Savela said Unifor doesn't believe the change is justified.
"This plan at Bombardier is well-funded, it's doing well ... The company's doing well. There's no rationale that we should be looking at a pension plan that takes away things that we've negotiated for our members when they retire."
Detailing the pension plan changes
The document — a summary of a presentation to management staff, dated July 16 — indicates that the change to the pension plan would apply to employees hired after May 31, 2014.
But Savela pointed out that newer, younger employees now make up the majority of the workforce at Bombardier in Thunder Bay.
The existing pension plan is a defined benefit plan, in which both the employee and the employer pay into it, but the onus is on the employer to manage it.
When workers retire, they receive a defined, guaranteed amount of monetary payments for the rest of their lives.
Although both the employee and employer would still pay into the plan, the employer neither guarantees the amount that is paid out upon retirement, nor how long that amount will last.
The employee's retirement income is basically at the mercy of the markets, the financial planner said, which shifts the financial risk away from the employer toward the employee.
Retirement health benefits in limbo
In terms of other retirement benefits, the document also notes that employees hired after Dec. 31, 2010, would receive a lump-sum payout of $300 in exchange for dropping health benefits at retirement.
The newest employees, hired after May 31 of this year, would receive no health benefits after retirement.
Feeling the financial impact of the strike
Colin Dainio — one of hundreds of workers who attended the meeting — said he's already feeling the financial impact of being on the picket line.
"I have personally worked a lot of overtime to buy something that I have wanted ... my whole life,” he said
“I just bought a Harley-Davidson. Now I'm in the risk of losing it."