Warning message

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Please give.

That was the message the Canadian Red Cross (CRC) gave its employees as it tried to shirk its responsibilities to fund a decent pension plan. Until, that is, CUPE led a multi-union coalition in stopping the scam.

In the process, CUPE also gained an important victory by obtaining a jointly trusteed pension plan, with equal representation from workers and management on the pension board. Not only was the surplus-robbing stopped, but future attempts have been headed off as worker representatives now control half the board.

Pensions can be confusing

Pensions are sometimes as confusing as the barrage of RRSP ads we face every February. There’s lots of jargon, lots of money and lots at stake, where retirement incomes can depend largely on which plan is used.
In the CRC case, the workers enjoyed a “defined benefit” plan. In essence, this guarantees a certain income after retirement that’s based on the workers’ earnings. Usually, responsibility for providing the assured benefit is the employer’s.

In the wake of the tainted blood scandal and the damning Krever Report, CRC tried to move the pension plan to a “defined contribution” model worse for workers.

As opposed to a “defined benefit” plan, a “defined contribution” plan contains no guarantee of retirement income. The worker makes contributions, the employer makes contributions, and whatever comes out at the end is given to the worker, usually for investment in personal annuities, or investment funds

Naturally, predicting the cost of buying annuities 20 or 30 years in advance is almost impossible. Coupled with turbulence in stock markets, banking on a “defined contribution” plan for your retirement is akin to gambling on your pension.

But the workers didn’t want to gamble, and so CUPE, represented by Sister Darcie Beggs of the Research Branch, led an unprecedented group of unions to fight for a new pension plan. The new plan would retain the advantages of the “defined benefit” model and cover the workers of the two new blood agencies established to take over from CRC.

This approach was well under way when the unions were forced to change direction. It was revealed CRC owed money to the pension plan and had filed for bankruptcy protection. These facts significantly complicated the process as a bankrupt company can’t be forced to repay the money it owes.
So a new committee was struck that negotiated an agreement with the CRC to honour its debt to the pension fund and a new pension arrangement with Canadian Blood Services, the new employer for workers outside of Quebec. Almost all of the more than 30 unions and locals invol-ved were represented by this committee.

Under the new arrangement with Canadian Blood Services, the new defined benefit plan is jointly trusteed, preventing the employer from taking unilateral action to amend the plan. And the long negotiations ensured CRC paid back $15 million of the money it owed.

No agreement in Qub0065c

Unfortunately, former CRC workers in Quebec are not yet similarly protected. Hm0061-Qub0065c, which took over blood services in Quebec, has yet to offer its employees the same type of pension plan. CUPE and other unions are continuing to fight for a fair, secure pension plan for Hm0061-Qub0065c workers.

The Red Cross story has valuable lessons for us all. The first is we should always be vigilant in monitoring our pension plans unions can defend guaranteed pension benefits and win! And the second is that working together, even for a long period of time, does pay off.

Jamey Heath, with files from Kevin Skerrett