“Canadians work hard. For our entire working lives, we dedicate our bodies and our brains to supporting our families and building our communities. A secure, enjoyable retirement is a fair and essential reward for those decades of labour. And the prospect of a good retirement helps Canadians get through the daily grind of working life.
We have the right to retire with dignity and security, and to enjoy the later years of our lives free from the need to work. Canada is a wealthy country, and we can afford adequate income security for all seniors.” (the canadian pension charter, CAW)
Does this still ring true today? Does our government and employers believe this, or is it just the hard working men and women of the CAW who are entitled to an adequate retirement lifestyle? Do other workers of Canada deserve to retire with a decent lifestyle as well? Who should pay for this retirement: governments, corporations, or the workers themselves?
Only 20% of workers in the private sector have access to a employer pension plan. Many of these plans are defined contributions, not defined benefits. A defined benefit plan is one in which the employee and the employer knows up front what the benefit wil be. This benefit is based on the age of the employee and years of service. This plan allow workers to develop a plan for their future retirement. A defined contribution plan is one in which the employer, the employee or both contribute a defined amount into the plan. When the employee decides to retiree, their pension will be based on the amount in the plan and how the investment has grown or shrunk. There is no assurances of what their pension will be; makes it difficult to plan for the future.
Our future pensions and health care benefits are up for discussion. We see more and more workers losing their pensions due to bankruptcies, plant closures and take-backs by their companies. Workers of today are losing ground on the hard-won pensions that past workers struggled to achieve.
When a company declares bankruptcy, the workers go to the bottom of the list when it comes to collecting from the company, whereas the banks and supplies are at the top the list. There is rarely any monies left to pay employees their owed wages and severance payments. Workers are the people who need it the most, especially if they are working part-time, sole provider for a family or earning minimum wages. We have seen this happen all too many times during the past several years. We have workers at Nortel fighting for their pensions, in Amherstburg at General Chemical and Aradco Windsor.
Workers at Nortel upon wind up of their pension fund were left with only 64% of it. The executives received an estimated $45M in bonuses before they closed the facility. Nortel workers continue to fight even today. They are not only fighting for their pensions but even more disturbing are the workers who are on long term disability, whose wages are not protected as they are being paid through an insurance company.
The retired workers of General Chemical in Amherstburg saw therir pensions cut by 40% and their benefits eliminated all together.
When Aradco/Aramco went bankrupt earlier this year, it took the willingness of the workers to take over the plant to demand some of the monies owed to them. They eventually were able to win a settlement of $400,000, well beneath the $1.5M that was initially demanded in compensation. Many workers in the Windsor community came to stand shoulder to shoulder with these workers. Many of those coming out had themselves been struggling with layoffs and plant closures. This battle continued in the months that followed. The workers came together as the journied to Ottawa to demand the government get involved in providing legislation to protect the workers. They then had to battle against the company as they tried to sell off the assets of the two facilities. They were joined by other workers to prevent prospective buyers from entering the building to view the equiptment that was to be auctioned off.
We will also see the closure of the GM transmission plant in the summer of 2010. With that closure will be many young workers, age 55, moving into retirement. They will be relying on GM to provide their montly pension cheques. GM has already gone bankrupt this year, will that be the end of it. Future autoworkers will not have the same pension and benefits that current workers have. They will have to pay into their pensions at $1 per hour worked a week. They will also have to pay $30/month into a fund to help pay for retirees benefits. All current employees and retirees who have not attained the age of 65 will also pay the $30, retirees over the age of 65 and surviving spouses will pay $15.
CUPE workers in Windsor just recently finished a strike that lasted 101days. One of the key demands was Post Retirement Benefits (PRB's). One of the tools used was that City of
Windsor workers were among the minority who received PRB's; and they should fall in line with the majority of other cities. The fight of the past has been to bring everyone up to the minority, not the other way around. We have to continue to raise the bar for all workers.
These struggles are nothing new. “Every worker is growing older and is inevitable being pushed toward the day when he will be 'Too old to work and too young to die.'” (Walter Reuther,1949) The fight for pensions in the CAW is something that started back in 1951, when the workers, members of UAW went on strike for 104 days. It was not funded in Canada until 1956. This fight continued in 1964, when workers demand and achieved 30 n' out, with reduced pensions and into 1973 when they bargained full pensions after 30 years of service. This is a fight that still continues today as auto companies demand concession after concession.
As workers in Canada struggle to support their families on fixed income of the Canada Pension Plan (CPP) and Old Age Security (OAS) of $1427.71 or $17,132.52 a year, CEO's live on a pittance of $930,000 annually in retirement. It doesn't seem right that the people responsible for mismanagement of corporate funds, elimination of jobs, underfunding of workers pension plans are able to reap the benefits in their “golden years”.
Is there a solution to help us in our retirement? The Canadian Labour Congress (CLC) has come out with a plan that would have the government take more responsisiblity for our senior members of society. This plan would see an increase in our CPP contributionns over the next 7 years, which would allow all seniors to enjoy a more dignified retirement. The contributions would go from the current contributions of 4.95% of salary to 7.8%. We would see the CPP benefit increase as well, to $1635.00 monthly from the current maxium of $908.75. (service Canada).
When CPP benefits increasing there would be a benefit to all Canadians. Workers who have struggled to achieve full-time employment, have seen their pension plans desimated, or never been able to access a company pension will now be able to retire with a reasonable level of income. This would also be helpful as workers are having to change jobs several times over their lifetime. This will ensure a benefit that is portable and protected for years to come.
CLC also suggests a plan protect the current private pension plans. They propose that mandatory pension insurance be put into place. This insurance would ensure that pensions have some level of protection. They propose that a higher fee be paid for poorer funded pension plans. They would like to see pensions protected up to $2500. Currently in Ontario, pensions are protected by the Pension Benefit Guarantee Fund. This fund guarantees up to $1000 of current defined benefit pensions in Ontario; this is inadequate.
The solution for the future is unclear however it is something we will need to continue to fight for. We need the government to intervene by implementing a system to guarantee an adequate level of income for seniors. They need to take over the system completely or put in legislation that would obligate employers to contribute to a system for their workers.
“The Canadian Pension Charter”. CAW,October 30,2009
Statistics Canada, CANSIM, table (for free) 280-000. last modified: 2009-10-12
“No Power Greater.” CD-ROM McMaster University Labour Studies. CAW/TCA Canada. 2003
paper I wrote for the McMaster Tools for Success course on pensions.
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