In the past, employers controlled everything that had to do with pensions. They usually decided the level of benefits paid, how administration would work, how investment policy should be made, even how to communicate to plan members. Far too often, they have exercised this control at workers’ expense – taking our surpluses for their contributions, freezing or reducing benefit levels, keeping plan members in the dark about their “deferred wages”, and all the while acting as though even offering a pension is a symbol of their generosity.
These days of employer domination of our pensions must come to an end. CUPE has policy and places gaining joint trusteeship of our members’ pensions as a high priority. Over the last number of years we have succeeded in achieving joint trusteeship of a significant number of our members’ pension plans from coast to coast.
Joint trusteeship means much more than having an advisory committee which makes recommendations to the real decision-maker. It also means more than simply bargaining improvements, as we are sometimes able to do at the negotiating table. A lot happens in a pension plan between rounds of bargaining. Having joint trusteeship means being the real decision-maker – hiring agents, developing investment policy, improving benefits, and communicating with plan members. These are all functions which have been left in the hands of our employers for too long.
The most important concrete advantage to joint trusteeship is the right to share decision-making about funding surplus and deficits. When surpluses were significant only a few years ago, due to low (or non-existent) wage increases and high rates of return on pension assets, plan members were often denied the benefits of these surpluses because our employers used them to pay their own contributions – or are simply leaving them in the plan. Where we have won joint trusteeship of plans, we were able to insist that surplus is used to make plan improvements.
Now when many of our plans are in deficit, our employers are forcing an increase in member contributions, reducing benefits or converting good plans into savings plans. The main reasons for the funding shortfalls are (i) contribution holidays coming home to roost; (ii) downturn of the capital markets in 2001-2003; (iii) federal government low interest rate policy and (iv) nobody challenging the actuary, particularly over increasing the maximum pension payable under the plan. Where we have won joint trusteeship of plans, we are able to challenge the actuary and our employers and take no concessions.
Joint trusteeship also offers an opportunity for increasing knowledge and the level of activity around the pension plan. Selecting trustees and keeping them accountable becomes a vital part of regular union business. Taking up important issues around the responsible investment of pension funds becomes possible. All of this promotes a far stronger understanding of the importance of pensions, and makes it easier to make improvements a bargaining priority.
CUPE’s experience with joint trusteeship has been extremely positive. We now have at least one major pension plan being jointly trusteed in almost every province – and more on the way. Through our pension courses, the message is spreading across the country, and gaining real say in the governance of our pensions is now a high priority and we are building a greater level of pension knowledge among our membership. This knowledge will be critical in building continued support for meaningful control over our plans and our funds.