THE WESTERN CANADIAN LUMBER WORKER $ PENSION PLAN OPTIONS $. - INDIVIDUAL CONTRIBUTORS NOW GIVEN THREE ALTERNATIVES By JACK MOORE IWA Regional President Ever since the federal gov- ernment announced that com- pulsory contributions to the Canada Pension Plan would commence January 1, 1966, our union has recognized the dilemma of individual con- tributors to company pension plans in the lumber industry. Our union was faced with the fact that our members had been denied the oppor- tunity to negotiate the com- pany plans now in force. As a result, our union and its member contributors to these plans were deprived of full information regarding em- ployer administration of pri- vate plans. SURVEY Our survey of the situation indicated that widely varying pension features as to contri- butions and accrued benefits had been adopted by the em- ployers. In these matters our members had no voice and were in possession of only such information as was cir- culated by the employers. The legal right to demand complete details regarding such matters as employer contributions, interest earn- ings, and investment of re- serves, has not been estab- lished. The companies have insisted upon the right to ad- minister these plans unilat- erally, subject only to ap- proval of the Department of Internal Revenue for income tax purposes. Consequently, some plans have been considered excel- lent but others have not fully gained membership approval. In some instances accrued benefits were “locked in” without opportunity for with- drawal before the stipulated time’ of retirement. PROTECTION When advised that the employers were planning to “integrate” or “dovetail” their plans with the Canada Pension Plan, the question of membership protection was discussed at length by the Regional Executive Board and the Regional Convention. The decision was made that the IWA should endeavour to secure for each individual contributor the right to ex- ercise one of several options that would best suit his or her own personal circum- stances. Our Kegional Con- vention and Executive Board took into consideration the fact that the ages of IWA contributors varied widely, and that each person’s age was a determining factor in estimating the combined ben- efits on retirement of the Canada Pension Plan and the Old Age Security Pension, as -well as the company plan. Each person’s present income and the amount of contribu- tions for two plans also ent- ‘ered into such calculations. Three main preferences were expressed by our mem- bers. Some wish to withdraw from company plans in order to invest their accumulated contributions elsewhere. A number of older work- ers desired to “stack” or “deck” the possible retire- ment benefits of the private plan in addition to those of the Canada Pension Plan and the Old Age Security Pen- sion. Ottawa with Mr. Campbell who, I am told by the Cana- dian Labour Congress, has the final say in various Pen- sion Plans registered with the Canadian government. The delegation was in- formed by Mr. Campbell that there has been a change in the policy of the government and that, provided we can get the companies to apply to amend their pension plans to allow the individual to have his money returned from the private plans, that the govern- ment will agree that this may be done. Those who have their money returned must pay in- come tax on this money; how- ever, it can be either spread over a 3-year period, or a special. lower tax for the amount drawn is available in one lump payment. It was made plain to us that this alternative could only be achieved if the companies who instigate and control the pension plans are willing to The decision as to which al- ternative a member takes is an individual decision which he or she must make them- selves; but I do think that the staff of the various Locals in the Regional Council should understand fully all the con- sequences of each alternative so that they may give some knowledgeable advice to the rank and file member when he or she makes a decision. Fraternally yours, J. A. MOORE, President. REQUEST I then wrote to all compan- ies sponsoring pension plans, as follows: Dear Sir: With the advent of the Can- ada Pension Plan most com- panies in the woodworking industry in western Canada have proposed amending their en a BEFORE YOU DECIDE (1) Check your Canada Pension Plan booklet to find out if, when, and how you qualify for its maximum benefits on retirement. (2) Find out if, at age 65, you qualify without a means test for the Old Age Security Pension under the amended act. (3) Estimate your total retirement income from the two public plans at your retire- ment age. (4) Calculate the additional income to be obtained from your company pension plan if: (a) You allow your contributions to date to remain in the plan. or (b) If you continue in any amended plan. (5) Calculate your losses if you withdraw from the company plan, i.e., what you may lose by forfeiting the company contributions on your behalf to date and what you will lose by payment of income tax on any amount withdrawn. (6) If you decide to withdraw, find out now how you may take advantage of the spe- _ cial income tax rate for such withdrawals and if you can, pay this tax in instal- ments. [ca 2 cA YS ca a EAP NNES STO ST ESET SE Some of our members saw an advantage in remaining in a modified company plan de- signed to reduce the com- bined monthly contributions but to provide increased re- tirement benefits in higher rates to present earned in- come. The right to an option not formerly permitted was ob- tained at a conference in Ot- tawa with officials of the De- partment of National Rev- enue, attended by myself, ac- companied by Brother Syd Thompson, Local 1-217, and Weldon Jubenville, Local 1-80. Upon return I reported to the Local Unions as fol- lows: ALTERNATIVES Dear Sir and Brother. As instructed by the Re- gional Executive Board, I was able to arrange a meeting in make the application. If we are successful in talking the companies into making such application, it will mean that present IWA members will have at least three alterna- tives: a) They can retain the old plan up to January 1, 1966 and sign a new, dove tailed pension plan with the com- pany, or b) Leave the present en- titlement which they may have up to January 1, 1966 in the old plan and not enter the new private dove tailed plan. This would, in effect, give them a pension which they have accumulated to date, plus the Canada pension when they retire, or c) They can withdraw their money from the private pen- sion plans now and just rely on the Canada pension plan when they reach retirement age. present pension plans so that they will dovetail with the Canada Pension Plan; and these companies are giving their employees a choice of a) Signing a new amended company pension plan which dovetails with the Canada Pension Plan, or b) Leaving the benefits ac- crued to the individual as of December 31, 1965 to be drawn upon retirement, and that from January 1, 1966 each individual who desires this alternative would not participate in any new com- pany pension plan. : On behalf of the members of the IWA who desire a third alternative I would request that your company make ap- plication to the government to amend your existing plan so that those individuals de- siring to do so could with- draw their money from the private pension plan with ac- cumulated interest, and rely solely on the benefits of the government has Canada Pension Plan on re- tirement. We have had meetings in Ottawa with officials of the Pension Department of the Federal government and are informed by them that the amended their past policy and will ap- prove any such application for amendment. We have also been informed by representatives of the Fed- eral government that there should be an agreed upon time limit in which the in- dividual participant would have to decide which of the alternatives he or she desired to take. Trusting to hear from you at your earliest convenience, I am, Yours truly, J. A. MOORE, President. REPORT I later reported to the Local Unions as follows: “After ascertaining from the federal government that they would agree to amend- ments in company pension plans which would allow any individual to take his money out with interest, I sent a let- ter to each of the companies in western Canada, requesting that they give our members this alternative. To date Crown Zellerbach has agreed to do this, and so have MacMillan, Bloedel and Powell River Limited and Tah- sis Co. Ltd. In the case of Mac- Millan, Bloedel and Powell River Limited every individ- ual who wants to take ad- vantage of this alternative must make up his mind by March 31st, 1966. I have had verbal indication from Celgar and B.C. Forest Products that they, too, will make this alter- native available to their em- ployees.” CONFERENCE To ensure that all Local Union representatives would be able to inform IWA con- tributors to private plans of available options, a staff con- ference was held November 4th. This was addressed by Brother A. Andras of the Ca- nadian Labour Congress, who had attended the Ottawa con- ference with departmental of- ficials, Out of his extensive research into pension prob- lems, Brother Andras gave a clear and explicit explanation of the Canada Pension Plan See “PENSIONS” — Page 8 © 7 ” SD Ai ie he bm