Working agreement on pension plan changes finalized

If ratified, agreement will give workers more control over key issues like increased pension payments

Representatives of unions, employers and government have finalized a draft working agreement that heralds important governance changes and gives union members more control over the Municipal Pension Plan, which most HEU members are covered by.

HEU secretary-business manager Chris Allnutt says the union’s Provincial Executive supports in principle the changes which will provide for joint trusteeship of the plan by employers and unions and creates a road map for further changes including increased pension payouts. A PE resolution will go to the union’s October convention to send the working agreement to a province-wide ratification vote of all members that would start by the end of October. In addition to materials being distributed by the plan itself, Allnutt says HEU is preparing a comprehensive communications strategy to make information available to members.

“These are important and positive changes,” says Allnutt, “and the executive wants to make sure that all members are fully informed before the ratification votes start.” Further details on the times, places and dates of the votes would then be released later in October.

In the current setup, the provincial government controls the plan and determines pension benefits and contribution rates, which makes worker-friendly changes difficult to achieve. Pension surpluses (a surplus exists when the plan takes in more in contributions and investment returns than it pays out in benefits) go entirely to employers, and employers are under no obligation to use the surplus to improve payments. Likewise, liabilities are the responsibility of the boss.

But under the proposed changes, plan members and their unions would share control of the plan with employer reps. HEU would be represented on the new plan board of trustees. Surpluses would be shared, which could be used to improve plan benefits for retiring workers. While our pension plan is well run and currently in a surplus situation, liabilities would also be shared. To offset the liability, employer and worker contribution rates would increase equally for a period of time. But the agreement also contains important provisions—or cushions—that will reduce the likelihood of increased contribution rates to deal with unfunded liabilities.

Allnutt says part of the working agreement addresses the current surplus and any generated in the future. The priorities include rebalancing employer and worker contribution rates (health employers, who currently currently pay more than HEU members, would have reduced contribution rates), increasing pension benefits paid on retirement, and creating special stabilization funds to protect against unfunded liabilities and ensure ongoing indexing of pension benefits and health benefits coverage.

In addition to information materials being prepared by HEU, the Municipal Pension Plan will produce bulletins and has established both a telephone hotline, 1-877-928-4040, and a website to deal with the changes. The web address is Copies of the first bulletin are enclosed in this mailout, and more can be obtained by phoning your servicing representative.