By JACK PHILLIPS

i Organised labor should set its sights on a minimum

dsion of $150 a month for retired workers, in terms of

“sent purchasing power.

’
y Ute wrong, dead wrong !

But

Fantastic, you say?

/ See
y, In 1936-37, approximately eight percent of the in-
Mustrial establishments in this country had private pen:
fon plans for their employees. Ten years later, the total

rk ovement.

# In the early decades of this century, -
Promoted such plans, in-order to make their employment
Mote attractive for executives and key personnel —
#'S€ as part of a limited welfare plan designed to dissuade

Se to 25 percent. By 1950, it reached 45 percent.
. though all the employees in these firms were not cover’
#; the growth was nevertheless astounding.
Today, more than a million Canadian workers. dre
Pvered by such group plans. It is more than a coinci
nce that this growth took

#towth in the strength and influence of the trade union

place alongside a record

big employers

or

Yorkers from joining a trade union.
Today, it is the trade union movement that is taking

@ lead in starting and improving such pension plans.
For every three dollars Ottawa paid out to senior

Mitizens in 1953, the sum of two dollars was set aside in
Mtivate group plans on behalf of workers who wanted a
Petter deal than the federal old age pension.

¢ A study of the facts will prove that this develop-

yt marks a positive achiev

ement by organised labor.

«. When the old age pension of $20 a month was in-
@ituted in 1927, it was a form of relief, granted at 70

Yea

despicable means test.

ts of age on the basis of a
hed and the pension has been

y
sthen, the test has been abolis

Since

fNcteased to $40 a month, payable to everyone at 10:

Yet it remains a national disgrace b

ecause it falls

“T short of providing the minimum requirements for a

jj Mfortable old age.

For those between the ages of 65 and 70
rf Pport themselves, there is an old age assistance al pw’
Nee of $40 a month, payable if the applicant can pass

U

*s

_* Means test.

sl In addition, both groups in B.C, by subjecting them:
Pes to the means test, can qualify for

who cannot

all or part of an

‘sistance bonus of $20 a month. The cost of this bonus
y Shared by the federal and provincial governments.

: is understandable, there-
6 ©, that workers employed by
j, WPanies showing a big pro-
a Should strive to compel
T employers to contribute
Ke ards private pension plans.
aad necessity has forced
~"™ to take this road.

i The trend today is towards
en, Integration of the private
ge on with the federal old
ee Pension. The idea is to

sq Ulate the private pension

’$ to insure a uniform in-

Ge for life. This means

‘ng a larger pension in the

tive years and a smaller

#,. “Nereafter because it will

be supplemented by the

weal pension. This gives the
worker a higher in-
© between 67 and 70 than

f ing

he would otherwise have, and
when he can make the best

use of it.
But private pension plans

have their limitations. Usual-
ly, they are found in large

firms with 500 workers or
more. Workers in ~ smaller
units, service workers and

many other groups have not
had the same opportunities.
Loggers, construction workers
and fishermen, by the very
nature of their employment,
are at the bottom of the list
of private pension coverage.

In some Canadian industries,
with similar problems, the
unions have set up multi-em-
ployer pension plans, with
employer contributions based
on percentage of payroll, with

1911 1915 1920

the worker preserving his
pension credits when he moves
from employer to employer.

In place of full vested rights
after 20 years in most private
pension plans, the trend is to-
wards vested rights after ten
years, with the unions blaz-
ing the trail.

A large number of the pri-
vate plans base the employer’s
pension (as separate from the
annuity purchased by em-
ployee contributions) on a
percentage of income in a
given year, or over a given
period of years. A common
formula is one percent of the
best year of normal earnings
in the last ten years, of em-
ployment, multiplied’ by the
total number of years of ser-
vice.

Thus, if in his best year the
worker earned $4,000, his pen-
sion after thirty years, would
be $1,200 a year, or $100 a
month. This method of com-
puting the pension makes al-
lowance for wage increases
won from time. to. time and
tends to bring pensions into
a reasonable relationship to
wages earned while employed.
This is preferable to a formula
which provides a flat sum per
year of service, irrespective
of earnings.

If this worker could retire
on $100 a month at 65 and re-
ceive his federal old age pen-
sion of $40, with no means
test, he would be only $10
short of the $150 we spoke
of at the beginning of the
article. If the federal old age
pension were raised to $75,
payable at 65 with no means
test, he would have $175 a
month, $25 over the minimum
target.

Of course, most of the old-
line party politicians, includ-
ing cabinet ministers who
spend more in a month than
most pensioners do in a year,
will say that ‘this is sheer day-
dreaming. But. didn’t this
kind of politician say the same
thing about unemployment in-

1925

1940

Labor, with its growing strength, must lead ‘the fight for better pensions.

1930 1935

surance and workmen’s com-
pensation, which became law

nevertheless?

The fact that the more pow-
erfully organized workers are
in the position to break through
first and win better pensions
for their members should act
as a spur to others and gen-
erally increase the demand
for higher pensions. Hand in
hand with this, there must be
the broadest political action
to increase the basic federal
pension and to make it pay-
able at 65, with no means test.

In 1950, the Bureau of Sta-
tistics made a survey of firms
with 400,000 workers covered
by pension plans, It learned
that 51.8 percent of the em-
ployers concerned were pay-
ing the full premiums. In the
remaining firms, the employ-
ers and employees were con-
tributing jointly.

In most cases where em-
ployées contribute to pension
plans, they pay from five to
six percent of their income.
When such payments are com-
bined with deductions for
other forms of group insur-
ance, the worker, particularly
if he is in a low-paid category,
really feels the pinch.

Unions negotiating new pen-
sion plans, or negotiating im-
provements for existing plans,
should consider the following
suggestions:

@ CONTINIUNG IMPROVE-
MENTS IN BENEFITS. As
long as retirement requires
a reduction in the standard
of living to which workers
have been a customer, ef-
foitis should be made to raise
pension levels.

® FULL VESTING. Workers
should be allowed to re-
tain possession of pension
credits just as they would
with their wages, without

the limitations of restrictive”

service and
ments,

® IMPROVED DISABILITY
PROVISIONS. Some plans

age require-

1945

= 1,346,00€
1,200,000

1,000,000

800,000

600,006

400,660

200,606

1950 1955

provide disability benefits
only if the worker is unable
to perform any work what-
ever. A more reasonable
standard should lay down
that the worker is unable

to perform any job covered
by the collective agreement.

@® PROTECTION OF WID-
OWS. Pensions often end
with the death of the re-
tired worker. Continuation
of some payments to the
widows is often a vital need.

Seen in this light, the tar-
get of a minimum pension of
$150 a month is no pipe dream
for the trade union member.

Organised labor must: insist
that the retired worker will
live in comfort, as a respected
senior citizen, and not in dire
poverty as a neglected old age
pensioner.

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FEBRUARY 15, 1957 — PACIFIC TRIBUNE—PAGE 5