By JACK WASHBURN
Director of
IWA Pensions

Those directly involved with
IWA pensions are heavily
engaged in giving effect to the
major changes and improve-
ments resulting from the 1977
wage settlements.

You will know in general
terms what these changes are
but considerable efforts will be
made in the next months and
on a continuing basis to explain
all of them fully. -

There are complex legal and
administrative problems sur-
rounding the merger of the
IWA-Northern Interior Forest
_ Pension Plan, the IWA-
Southern Interior Forest Pen-
sion Plan and the IWA-Forest
Industry Pension Plan into one
master Plan: the IWA-Forest
Industry Pension Plan. |

There are also the vital and
sometimes very difficult
problems involving recognition
of all eligible past service.
- These have required much ne-
gotiation with the Industry
side, resulting in delay. Many
pensioners who retired after
June 30, 1977 are still receiving
pensions on the old basis, or
only partially on the new basis,

because of documentation dif- ,

ficulties, through no fault of
‘ their own.

However, progress is being
made. By the end of the month
all of those pensioners will re-
ceive a documentation kit to
assist them in establishing all
of their eligible past service.

Once established, their past
service under the new benefit
structure will produce con-

siderably larger pensions for -

almost all of them and, of
course, these increases will be
retroactive. Then all active
members aged 59 and older
will receive these documenta-
tion kits. Eventually all active
members-who have past ser-
vice will receive them.

All this is being done in
stages in order to get the most
important things moving
quickly and to control the im-
mense flood of paper work the
past service pension improve-
ment will generate.

Because of the very special
history of our industry, parti-
cularly the many hundreds of
small operations that have dis-
appeared over the years, a
good number of our members
are going to have to take a lot
of trouble and.some will have
extreme difficulty or even may
find it impossible to establish,
by any concrete evidence, all
of their past service.

We recognize this and are
working hard to agree with the
Industry side in establishing a
system that is fair, humane,
sensible, as simple as possible,
and which provides anyone

means of appeal to an umpire
who has had long experience

and a very good knowledge of
our industry in all its aspects.
We seek your patience and
understanding. More about
this and much more besides
will be communicated to you in
the future.

I know of no group of
geniuses in the word that could
negotiate with an industry such
as ours a vast pension plan, as
the IWA Forest Industry
Pension Plan is, extending
across half of Canada, with a
continuing process of change
and improvement, and yet
keep it nice and simple. Even
the Federal Government, with
all its powers and resources,

could not make the Canada_

Pension Plan easily compre-
hensible in all its aspects to the
average working person.
Therefore our Plan is com-
plicated and much effort has to
be made to ensure our mem-
bers understand how it works
for them.

_All the above having been
said, I thought in this issue of
the ‘Lumber Worker’ it might
interest you to have some idea
of the level of pensions that are
payable to people who retire at
age 60 or older, in 1978, under
some of the options available.

First, I want to sound a note
of warning. The figures in

boxes are estimates based on

the regulations of the Plan
having been met. Also, they
are faintly understated to
make some allowance for
minor differences in hours
worked, month of birth, etc.
Better a man should get a
slightly higher pension than he
thought, rather than a lower
one. The critical Plan
regulations involve being
able to establish your length of
eligible service and having
been on the payroll of a partici-
pating company on the date the
Plan was set up at your operat-
ion.

These having been met,
there are other, less important,
factors that will affect the
figures for you, such as the
number of hours worked in
each Plan Year.

In the boxes are some figures
that may puzzle you. For
example, in the box labelled
“Plan Member’s Age 62 — 63”
you will see that pensions are
the same whether you have 11
years or 12 years. This relates
to the fact that the Plan pro-
vides for the higher of the old
past service benefit before the
latest improvement was made
or the past service benefit
based on the latest improve-
ment. For some relatively
short service people retiring
now the old benefit is better.

The boxes tell you roughly
what you can get in 1978 if you
retire and are now in the age

who feels he has not been pro- Tange of a box.

perly dealt with a decent —

It is not an indication of what
younger members will get.
Most of them will have much

Notes:

THE WESTERN CANADIAN LUMBER WORKER

more, depending, among other
things, on their age, their ser-
vice when they come to retire,
and, most positively, on what
the I.W.A. is able to negotiate
by way of improvements in the
pension plan over the years
before they retire.

The various options listed

are fairly easy to understand.
They all have the same ac-

tuarial equivalent value. This
means that, for any one indi-
vidual, the option he chooses
may make a very great money
difference, depending on his
ultimate fate, but based on the
collective experience of 100,000
people, the money value of
each of the options is the same.

The Normal Form (Life with
Five Years Certain) means
that your pension is payable
for.as long as you live but, if
you should die during the first
five years, the pension is cont-
inued to your beneficiary until
the first five years runs out. It
is called ‘‘normal’’ only
because it is the option
assumed by the Plan for you if
you do not pick another option.
It provides a certain protection
to your beneficiary and is there
as a safeguard. It is not
‘“normal’’ in any other sense.
A man will want to provide
more protection than this to his
good old wife who put up with
him, bore children, and packed
his lunch box all those many
long years.

Option No. 1 (Life) with Ten
Years Certain) means that the
guarantee of your pension
being paid to your beneficiary
if you die is extended to the
first 10 years and Option No. 2
(Life with Fifteen Years Cer-
tain) extends the guarantee to
the first 15 years.

Option No. 3 (Straight Life)
pays your pension as long as
you live but stops when you die.
It is picked rarely. Almost.
everyone has somebody to
whom he might wish to leave a
benefit in case he dies early
after retirement.

Option No. 4 (c) (Joint and
Survivor Income) pays a peh-
sion to you during your lifetime
but it continues on after your
death to your beneficiary
during (usually her) lifetime in
reduced amount. The red-
uction in 4 (c) is:to three-quart-
ers but other reductions, such
as two-thirds or one-half are
available. Or there can be no
reduction at all.

Option 4 (g) pays a pension
for as long as both you and
your beneficiary are alive. As
soon as one of you dies it is re-
duced to three-quarters of
what it was and is payable for
the lifetime of the survivor,
whether that’s you or your
beneficiary. Other reduction
amounts are available, or no
reduction.

You should note that the fi-
gures given are based on a wife
(the beneficiary) being three
years younger than her

1. The amounts shown in the following tables are APPROXIMATE.
2. The estimated Joint and Survivor Income option assumes that your beneficiary is three years
younger than you, !f your beneficiary is more than three years younger than you, the amounts

quoted under Option 4 will be we conversely, if your beneficiary
‘ able will be greater. There is also provision
Sal to two-thirds, one-half, or continuing in full.
come option may be elected together with the norma’

husband. If you are 65 and your
wife is 18, then the figures
would be very different
because the Plan is then giving
a guarantee of a pension to be
paid to someone who may live
a long time indeed. Actuarial
tables show that a female aged
18 can be expected to live until
76. Joke of the day is that in
this case the husband might
still consider it because if he is
65 and his wife is 18, it is un-
likely he will live very long

anyway!

Option No. 5 (Level Income)
is available only to those who
retire early, that is between 60
and 64. What it does is pay a
higher pension until 65 and
then a lower pension after-
ward. The difference after age
65 is made up approximately
by the Old Age Pension and the
Canada Pension Plan. That is
why it is called “Level In-
come.”’ It is designed to make
it easier for a person to retire
early.

The existance of this option,
now that pensions for long ser-
vice members have been so
much increased, makes us
doubly anxious to get the whole
system of past service docu-
mentation properly set up and
running. Everyone approach-
ing 60, or in his sixties, has a
right to be able to get his past
service established and there-
fore find out what he could re-
ceive under this option if he re-
tired early. There are hun-
dreds of our people who, if they
knew what they would receive,
might find it possible to retire
now and might desperately
wish to get out of that plywood
factory or that sawmill, or
whatever.

Each time I do an article on
pensions I try to mention the
fact that at present the Plan
has no death benefit as such
prior to retirement. However,
the Plan does provide a way in
which a man 60 years of age or
older who continues to be
actively working can protect
his wife.

By writing to the Plan Ad-
ministrator, IWA-Forest In-
dustry Pension Plan, 609 - 2525
Willow Street, Vancouver,
V5Z 3N8 or telephoning (604)
873-3951 you can get an election
form for the Joint and Survivor
Option. Completing and re-
turning this form means that if
you die before age 65, while
still working, two-thirds of
your pension is continued for
the lifetime of your spouse.
This can be discontinued at any
time — in case your wife runs
off with the milkman. When
you actually refire you can
continue the option or change
to another option as you wish.
It has the slight cost of 1% of
your ultimate pension (based
on the Normal Form) for each
year you have protected your
spouse. Thus the maximum
cost for a man of 60 is 5%. It is
worthwhile protection and

: is older than you, the amounts
under this Option which enables you to elect a pen-

form of pension or any one of

more
should make use of it.

One last thing. There is great
talk these days about the “‘in-

dexing” of pension plans, first
initiated by the Federal gov- —
ernment for its civil servants —
(and its politicians) and now —
spread to the Provinces. Itisa

process whereby pensions are
automatically increased on a
regular basis to meet increases
in the cost of living index.
Normally it can only be done
by employers such as govern-
ments, who have access to un-
limited funds. Ordinary em-
ployers cannot at present do it.
They cannot write a blank
cheque into an unknown future.

The talk is that now there are
two kinds of Canadians; one
has its pensions indexed and
one is doomed to see the pur-
chasing power of its pénsions
rapidly eaten away by infla-
tion.

The IWA deplores the
existance of the second kind of
Canadians and is doing what it
can through political action to
change this, but we are re-
solved thatits own members, if
there continues to be these two
kinds of Canadians, will belong
to the first kind.

So far, whenever an increase
in the funding, or in the real-
ized actuarial assumptions as
the Plan progressed made pos-
sible an improvement in the
benefits being accrued by
active members, the Plan also
improved pensions in process
of payment. Since the Plan
began, in June of 1973, that has
resulted in existing pension in-
creases considerably in excess
of the rate of depreciation of
the currency.

By periodically improving
existing pensions we feel we
will achieve over the years on
an ‘‘ad hoc’’ basis at least the
equivalent of the indexing of
civil service pension plans. The
process is feasible because, as
we negotiate additional fund-
ing into the Plan from time to
time, using a portion of it to in-
crease pensions in course of
payment, employers are not

‘being asked to write a blank —

cheque. They will know what
their labour costs during the
next contract term may be. It
is therefore possible for both
sides to negotiate an agree-
ment. ~ .
We are absolutely deter-
mined that this process will be
continued as long as neces-
sary.
It has been and is a comfort
to our approaching 3000 pen-
sioners and beneficiaries and
ought to be a comfort to every
active member in the pension
plan, no matter what his age.
There is nothing more
certain than that we will all
grow old, unless we die, and
that when we are old we will
need money to help finish our
lives gracefully and with some
happiness. This is what we are
about in this pension business.
We still have far to go.

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