- Plan design (ex: factor 85)
- Governance (ex: Jointly Sponsored Pension Plan to share risk between employer & employees)
- Investment policy
- protect against extreme events and maximize fund returns
- Asset mix (equities, long term bonds, real estate, currencies…)
- Funding Policy (ex: employer and plan member contributions)
- Valuation methodology (ex: discount rates, mortality rates…)
The 2012 and 2014 Ontario Budget encourages employers to work with their bargaining agents to convert single employer pension plans to a JSPP or merge with another plan. A governance change would also include a gradual move to a more equal sharing of contribution rates within a five year time frame. Presently active pension plan members at WSIB contribute 7% ($22.6 million) of their salary while our employer contributes approximately 17.5% ($54.4 million - this does not include special payments of $22.8 million required to reduce the deficit). The union is only open to discuss a change to these contribution levels under a jointly sponsored pension plan arrangement which gives members a meaningful role in decisions that affect their deferred income. The employer as the plan sponsor invited OCEU to participate in a risk management study designed to help the parties make informed prudent decisions that align with fiduciary obligations. The results show that the best way to mitigate risk is to convert to a JSPP and gaining Provincial Government approval for permanent relief from funding based on the solvency method. The solvency method is used to force higher contributions for plans considered to have a higher risk of shutting down. This is not the case for the WSIB Employee Pension Plan. WSIB is expected to exist well into the future without risk of shutting down.
- Last year the coverage threshold for Operations was set at 70%. We believe approximately 10% of all request were denied impacting 200 people.
- This year the 80% coverage threshold is estimated to double the rate of denials to 20% thus impacting 400 people
- Add to that; approximately 70% of employees in Operations have a flex arrangement. The suspension from June to Sept will impact approx. 1400 employees.
- More senior employees may have some or all their vacation approved but they know the denials to others impacts us all. When our co-workers don't get a break we know it will impact their wellbeing and productivity which in turn affects us all. We are all in this together.
So what action can we take now? Since we have an active Collective Agreement a walk out, work to rule, coordinated call to stop working overtime, sick out, or other coordinated slow-downs all constitute illegal job action or illegal strike. We do not and cannot support illegal strike activities. Pushing Back!
- We have a winning record of grievance wins. Grievance / litigation work will continue.
- Our show of solidarity by dressing in Black and White on Thursday March 27, 2014 had a participation rate of over 85%.
- 96% of members are ready to support an open petition letter.
- 97% of members will support a campaign to ensure they and their co-workers take their breaks and lunches and ensure their overtime is paid.
- Demo day(s) and a Union tour are also in the works.
Open letter / petition coming soon. We must hold our employer accountable for any actions that contravene the Collective Agreement and that do not match their stated goal to be recognized as a top 100 employer. The letter will help highlight employee concerns such as:
- Your hard work should be rewarded where collective agreement disputes are rare and not the norm.
- Low employee morale must be recognized as a real problem
- Too many jobs are under staffed
- High employee disability rates
- Wellness days (employees have been denied access to their credits),
- High employee assistance program usage
- Negative impacts to vacation and flex work arrangements
- Start and Finish times
- Article 6 expedited bumping
- Near total lack of engagement with Employees and Union Representatives in decisions that affect them
- Employees should be trusted and not micro-managed
- Your ability to use flex and vacation time should be improved not restricted.
- 88% support job action if WSIB attempts to make unilateral changes that either drastically cut benefits or turn our Pension Plan into a defined contribution plan. (*850+ votes cast / participation levels impacted due to Rogers phone blackout on Oct. 9)
- 99% support converting our current Pension Plan to a Jointly Sponsored Pension Plan. (*1400+ votes cast)
As a result of our lobbying efforts and the 2000 pension petitions members completed, the Minister of Finance directed WSIB to actively engage the Union on options to make the Defined Benefit Pension Plan more sustainable and the option to convert the defined benefit plan to a jointly sponsored pension plan (JSPP). Why do members want a jointly sponsored pension plan?
- The pension plan is a significant part of our compensation package which is negotiated during rounds of collective bargaining. Active members of the plan who make contributions deserve to have an equal say over what happens to their investment and to their retirement plan overall and in partucular contribution and benefit levels.
- Another important goal of joint trusteeship, particularly at this time, is to dramatically cut the deficit without cutting benefit levels by gaining permanent solvency relief available to government agencies who establish as JSPP.
- Members want to bring stability to our Pension and gain an equal voice in the governance of our Plan to ensure we keep our defined benefits
|Two primary measures of pension surplus/deficits|
Presently both of the above metholds guide Plan funding. However, if our plan was jointly trusteed it is expected the Provincial Government will only require funding using the "Going Concern" methold. As a result the rules to measure the cost to fund the Plan would make the Plan more affordable and sustainable. The current deficit level that would be required to be funded would be approximately $350 million less and it can be resolved over a 15 year time-frame. (note: solvency deficits that existed prior to a JSPP may not be exempted and are the responsibility of the employer) The Unions goal is to successfully negotiate joint trusteeship in order to preserve the defined pension benefits. My promise to you is make trusteeship a reality in order to bring stability to our Pension. Contribution Rates: The deficit is a serious problem. As a result of the deficit our employer is contributing 17% ($74 M) compared to our *7% ($23 M – see below for contribution rate calculation). The Provincial governments "temporary relief program" requires the deficit to be drastically reduced in order to cut employer cost. This means that without joint trusteeship $625 million in savings would have to be found to attain 100% funding by reducing pension benefits. The Province is also looking for a more equal employee/employer contribution rate. Our current rate of 7% is actually quite low compared to the majority of other plans. Contribution rates are likely to increase whether we have joint trusteeship or not. Example: Contributions to the Plan (source: A Guide to the WSIB Employee's Pension Plan) Suppose your Pensionable Earnings for 2013 are $76,000. The 2013 *YMPE is $51,100 and the *YBE is $3,500. Your contributions to the Plan would be:
|7% of your Pensionable Earnings, up to the YBE||7% x $3,500 =||$245|
|+||5.2% of your Pensionable Earnings between the YBE and the YMPE||5.2% x [$51,100 - $3,500] =||$2,475|
|+||7% of your Pensionable Earnings above the YMPE||7% x [$76,000 - $51,100] =||$1,743|
|=||Yourtotal contributions to the Plan in 2013||[$245 + $2,475+$1,743] =||$4,463|
* Year's Basic Exemption (YBE) Every Canadian is entitled to earn a certain amount in a calendar year before beginning to contribute to the Canada Pension Plan (CPP). This amount is referred to as the Year's Basic Exemption (YBE) and is set by the federal government. * Year's Maximum Pensionable Earnings (YMPE) Contributions to the CPP are made on the portion of your annual earnings that exceed the YBE, up to a maximum known as the Year's Maximum Pensionable Earnings (YMPE). The YMPE is adjusted each year, based on the average Canadian wage, and is set by the federal government. Temporary Solvency Relief Program: Should the parties agree to convert our Pension Plan to a Jointly Sponsored Pension Plan (JSPP) the employers application for temporary solvency relief can come to an end. The Provincial Governments relief program is designed to reduce employer cost by either reducing Plan benefits and/or reducing employer contribution rates by increasing employee contribution rates. The first phase of this "relief" program requires the employer to reduce their cost by a savings target of 11% or $90 million. The next phase would require additional savings to resolve the $625 million dollar Solvency deficit. The deep cuts to benfit levels can be averted by converting the Plan to a JSPP and increasing employee contribution rates. Next Steps regarding the Pension: We have agreed to create a committee of senior employer and union representatives. The committee will explore trusteeship models. Union representatives include Harry Goslin - President, Tony Dinardo – Treasurer, Tony Maccarone – Chief Steward and Fred Ho – CUPE National Representative. The Union has retained legal services and actuarial support from experts in the field who have previous success converting pension plans. If WSIB and the Compensation Employees Union can come to agreement on the structure of a JSPP we will then consult with all Plan members before moving forward. You should know that typically negotiations in other workplaces have taken 1 to 2 years. However TTC did it in less than 1 yr. No decisions have been made to alter the defined pension benefits. In the event the market place does not produce ample returns on investment one or two changes may take effect on a temporary or permanent basis BUT this would be communicated I can assure you that no changes to the plan will be made without pre-notice so that Plan members can make informed decisions. The Pension Benefit Act requires a minimum of at least 45 days pre-notice before a change can come into effect. The Union and Employer are exploring options and are nowhere near ready to move forward with any changes. Both parties want to ensure all Plan members have time to be consulted before any changes can take effect which will enable future retirees to make informed decisions.
- Employer premiums have increased by 2%
- 10.5% investment gains
- 2012 – 1st time since 1997 WSIB put $300 into the insurance fund
- UFL is currently $13.3
- For 2013 the organization expects to add another $762 million to the fund which will further reduce the UFL down to $12.5 billion
UFL improved from 52% to 56.5%
- Means WSIB will meet the legislative requirement to achieve 60% funding by 2017. In fact we will likely surpass the threshold
- 92% of iw's rtw within 1 yr
- 2012 there were 23,000 site visits to negotiate accommodations for RTW
- Increased spending on Health Care by 1.4%
- Since 2009 benefit payments have declined by $514 million or 16%. This is attributed in small part to less claims coming in but largely due to improved RTW outcomes.
Our administrative cost are better than most non-profit charities
- No-fault compensation: Workplace injuries are compensated regardless of fault. The worker and employer waive the right to sue. There is no argument over responsibility or liability for an injury. Fault becomes irrelevant, and providing compensation becomes the focus.
- Collective liability: The total cost of the compensation system is shared by all employers. All employers contribute to a common fund. Financial liability becomes their collective responsibility.
- Security of payment: A fund is established to guarantee that compensation monies will be available. Injured workers are assured of prompt compensation and future benefits.
- Exclusive jurisdiction: All compensation claims are directed solely to the compensation board. The Board is the decision-maker and final authority for all claims. Nor is the Board bound by legal precedent; it has the power and authority to judge each case on its individual merits.
- Independent board: The governing board is both autonomous and non-political. The Board is financially independent of government or any special interest group. The administration of the system is focused on the needs of its employer and labour clients, providing service with efficiency and impartiality.
Unfunded Liability: Employer premiums are inadequate in that the funds collected from Ontario Employers fail to cover the cost of injuries occurring in their workplaces.
- Employer premiums were reduced between 1996 & 2003 from $3.00 to $2.13/$100 of payroll.
- Had premiums not been reduced the unfunded liability (UFL) would have been $3.8 billion in 2008 Vs. $14 Billion in 2010
Liberal Government Promise: "full funding will not be achieved on the backs of injured workers"Statement of Work contract with Deloitte: "WSIB's largest area of risk lies with its ability to reduce its claims burden whilst complying with legislated benefits requirements to injured workers". "The current 12 billion funding deficit (which as we now know Harry Arthurs funding review clarified the unfunded liability is $14 - $16 Billion) is connected to 71% of its claims burden being legislatively locked in. Whilst these claims cannot be touched, the risk associated with new claims coming into the system, and those reaching legislative lock in duration, must be mitigated" *It appears Deloitte was hired to cut the cost of active and new claims.
- An employee increase from 7% to 10% saves WSIB $97 million
- An employee increase from 7% to 12% saves WSIB $143 Million
Note: This proposal does nothing to reduce the pension plan deficit. It only reduces the employers cost by increasing yours. This is a pay cut of up to 5%. + Reduce accrual rate from 2% to 1.5% [cuts $225 mil]
- Presently if you work 30 years you get 60% of your wage.
- The new formula will only give you 45% of your wage.
Example: first 15 years at 2% accrual equals 30% blended with the last 15 years at 1.5% accrual equals 22.5% for a total of 52.5% of your wage when you retire instead of 60% if you have been with the WSIB for 15 years and plan to work 30 years. + Reduce best 5 of last 10 to Career Average Earnings [cuts $132 mil]
- This means your retirement payment will not be adjusted for inflation. As a result, the purchasing power of your income will decrease every year.
This change will further reduce your retirement income leaving you with less than the 52.5% above +Remove indexing 75% of consumer price indexing (CPI) [cuts $148 mil]
- This means your retirement payment will not be adjusted for inflation. As a result, the purchasing power of your income will decrease every year.
We Pay - We Deserve A Say!
Ontario government policy. The Ontario government encourages public sector single employer plans to convert to JSPPs, on certain conditions. They are primarily seeking
equal responsibility for plan deficits and surpluses and
caps on employer contributions to these plans. Currently, the ratio of employer-to-member contributions is about 2:1 (13% employer and 7% employees). The Union would consider a "funding deal" that gradually brings the parties to a ratio of 1:1.
- Permanent solvency relief. The Plan could obtain permanent solvency relief, as most JSPPs are exempt from solvency funding on the theory that they are plans whose employers are unlikely to ever become insolvent, and that where there is joint governance, there is sufficient member "voice" at the table to be able to control risks to which members are exposed.
- Certain plan decisions could be removed from the collective bargaining cycle. In striking a deal with the employer, the union could agree to make plan-related decisions subject to an alternative decision-making process, with a dispute resolution mechanism that is outside the collective bargaining cycle, and thus may be more responsive to Plan timelines and decision-points.
- Union consent is required for temporary solvency relief. The broader public sector relief is open for "phase 1" applications made by February 28, 2013. Although union consent for phase 1 is not required union consent is required when entering "phase 2" following the 3 year moratorium. The Union represents more than one-third of active members of the Plan and has a de-facto veto over the administrator of the Plan to reduce future benefits or increases to employee contributions such that the savings target is met. In addition the terms of Article 28.01 of the Collective Agreement state: "The Employer and Union shall negotiate matters pertaining to the Pension Plan during collective bargaining".
- The 10 year amortization option requires a reduction to pension plan benefits and only provides temporary relief. As such this is not the most sustainable long term option and would not have the consent of the Union nor the MAC since the JSPP option provides permanent solvency relief and would not necessitate benefit reduction.
Continue to support your union and make sure the employer knows you do!
- Placed 286 redundant employees to date to avert layoff
- Negotiated an enhanced VE package (VE & Salary Continuance)
- Negotiating for more VE pick ups to generate postings and offset lay off notices
- Secured a Full-time CUPE National Representative. Previously our local was only provided with a part time representative.
- Went from 60 to over 300 Grievances
- Retrained top Labour Lawyers for the Flex, Start time and Article 6 - job security Grievances
- Seeking a "cease & desist" order to stop the expedited bumping
- Building a case for additional National Representatives to be assigned
- Collective Bargaining 2011
- WSIB Standing Committee to Ontario Government (see tab under important documents)
- Appeal Modernization submission (see tab under important documents)
- Benefit Policy Review submission via CUPE Ontario and the Ontario Federation of Labour
- Manage employee claims, disability cases and related appeals
- Conducted largest member survey in Locals history
- Numerous meetings with OFL, CUPE National, CUPE ON, ONIWG, and other associations to strengthen our position
- Protecting our Pension
- Provided basic pension training for union Council
- Training all front line union representatives to better serve members
- Pay Equity Agreements
- New JJE Plan with $10 million in increases and green circle protection
- The local worked with CUPE Ontario to table a detailed report for the Government of Ontario's hearings held at Queens Park.
- Highlights: o Stakeholders deserve to know what is happening with the $206 million earmarked for Prevention and payable by WSIB to the MOL effective April 1, 2012? If there is no Prevention workforce at the MOL how is the $206 million being used to prevent accidents and save lives?
- o Even with Bill 119 coming into effect Ontario continues to rank lowest in Canada with approximately 72% of the workforce covered. As you know Ontario's economy is changing with new industries. Many of which are not covered which means Ontario's compensation system will continue to shrink. The problem is that legislation that defines who is covered and who is not, has not been amended since the Meredith report of 1913.
- For the full report go the "Important Documents" tab
- For the first time in the history of the Union some employees may be facing layoff. The Union has engaged the employer about options to prevent layoffs and allow staff to leave voluntarily. However our employer has told us they are not interested. We will fight this.
- The employer has advised the Union they believe they have the right to trigger bumping before the 130 working day notice expires. The union has made it clear we will legally challenge any attempt to circumvent Article 6 job security provisions of the Collective Agreement.
- The Employer has outsourced the data centre which was housed at the Manulife Centre in Toronto.
- The organization has also issued Request for Proposals in August to find a provider that can help automate a variety of Insurance transactions and decision making.
- Freedom of Information (FOI) request has been submitted to secure the 2011 Pension Valuations for the WSIB Employee Pension Plan and the Supplementary Pension Plan commonly referred to as the Executive Plan.
- The Ontario budget is calling for an increase of employee contributions to match those of the employer. This means employee contributions would increase from 7% to nearly 10%
- Members deserve to know what is happening with their pension!
- Elections for all Unit Advisory Committee (UAC) positions are scheduled for November 14, 2012
- Following this there will be Union Council meeting with 2 days of training.
JJE salary implementation
- Agreement was reached to correct how some calculations were processed for the JJE implementation. The three compressed salary grades 860/865/870 will be revised so that no employee takes more than 2.5 years to progress from minimum to maximum.
- Staff with a one grade increase and a different number of steps will be given time credit for time in the job
- Special Placement employees will receive salary differential
- Salary rule #6 in the Collective Agreement will be updated to ensure there is one fair rule moving forward for all staff.
- Could be OCT/NOV for the salary adjustments to be processed.
- Not successful on 6 Flex cases with Human Rights cases.
- The local has retained legal Council with Sack, Goldblatt, Mitchell to assist us in the bargaining in bad faith and flex policy grievances.