Through effective lobbying backed by a powerful mandate from members for political action, CUPE Ontario moved Bill 206 closer to what members of the OMERS pension plan need to be able to retire with dignity. And, where the bill falls short, we will have an independent review of the new governance structure enshrined in law.
CUPE wins right to bargain pensions locally
For the first time ever, CUPE members in school boards, municipalities and children’s aid societies (CAS) have won the right to bargain pensions at the local table. This will mean, for example, the possibility for earlier retirement with unreduced pensions and using the best three years average salary rather than the current best five. In the future, CUPE Locals in the municipal, school board, and CAS sectors can place these demands on every single bargaining table. Keep in mind CUPE has the right to strike whereas police and fire do not.
Cap on benefits lifted
We convinced the government to remove Section 12 of the bill, which placed a cap on benefits for retirees and made any significant benefit improvement impossible. With that section removed, CUPE will be able, in future, to negotiate pension improvements similar to what is available in other public sector pension plans.
Representation by population
In the original Bill 206, CUPE was seriously under-represented on both the Sponsors Corporation and the Administration Corporation. We won representation by population on the Sponsors Corporation, which makes decisions about benefits and contribution rates. We expect our under-representation on the Administration Corporation to be corrected through the review process.
Cross-subsidization, where the majority of members in the basic plan would subsidize rich supplemental benefits for police and firefighters, was a real possibility under the original legislation. With the help of the NDP, we won an amendment that put language into the bill preventing cross-subsidization. It is also listed as a specific issue to be part of a future independent review of the new governance structure.
Supplemental benefits for paramedics
In 2005, paramedics finally won recognition as a public safety occupation under the federal income tax act. Somehow, the provincial government missed the news and left paramedics out of the original Bill 206. CUPE Ontario was able to win amendments that now give paramedics similar access as police and firefighters to supplement benefits. We believe that we will be able to use the independent review to pursue the outstanding issue of allowing paramedics the same normal retirement age of 60 in the OMERS basic plan.
Independent review enshrined in law
The McGuinty government has agreed to introduce legislation no later than June 30, 2006 that will mandate an independent review of OMERS governance within six years of Bill 206 being passed. And, within three years, the minister of municipal affairs and housing will consult with unions and employer representatives to assess the progress in implementing the new structure.
The timeframes are appropriate because the proposed Sponsors Corporation, which will make decisions about benefits and contribution rates, operates on a three-year cycle. Pension plan valuations are also conducted every three years.
The reviewer will look at the effectiveness and fairness of decision-making structures, especially the approval process of CUPE supplementals. This person will be someone agreed to by the minister and employer and employee representatives. If they cannot agree, the person will be appointed by the Chief Justice.
Issues for review include:
§ the effectiveness and fairness of the overall governance framework
§ decision-making by the Sponsors Corporation, including the provisions for mediation and arbitration
§ the overall fairness of the OMERS pension plan and its financial stability, including making sure that supplemental benefits are not subsidized by the basic plan.
Pension plan autonomy at last
One thing that will not be under review is the general principle of transferring governance of OMERS from the province to the employee and employer members. When Bill 206 is passed, it will be the culmination of a campaign for pension plan autonomy that CUPE Ontario has waged for more than 10 years.
Finally, CUPE members in municipalities, school boards and children’s aid societies are going to have the same right as members of other major public sector pension plans to autonomous management. It’s long overdue.
CUPE members in OMERS have shown amazing strength and solidarity in the campaign for pension fairness. Your determination will help us through the implementation and review of the new OMERS governance structure and ensure that our remaining issues are addressed.