THE WESTERN CANADIAN LUMBER WORKER | CONTINUED FROM LAST ISSUE WILL WE "STACK" PENSION INCOME? WA members will start making their compulsory contributions to the Canada Pension Plan on January 1, 1966. This will influence any Union proposals regarding company pension plans. At least a better basis has been laid for assured income upon retirement. The $64 question in the minds of many [WA members is what will happen the com- pany pension plans, which hitherto have been non-nego- tiable. The Union has little to say about the pension plans introduced and managed by the large integrated compan- ies. Some of these plans have “locked-in” retirement bene- fits which make it impossible’ for the employee to withdraw his accrued benefits now for investment elsewhere. Some are promoted in such a way as to demand contributions as a virtual condition of employ- ment. The worker who-now con- tributes to a company plan is wondering if he should be re- quired to continue his con- tributions in addition to the compulsory contributions for the Canada Pension Plan. An employee whose earn- ings reach or exceed the $5000 ceiling on pensionable annual earnings will pay $6.60 a month on the check-off. This is 1.8% on $4400 of his earn- ings as he gets an exemption on $600. It represents 1.6% of his total earnings. Below the $5000 ceiling on pensionable earnings, the con- tributions are graduated as hereunder. % of Total Earnings Contributions Earnings $100 $0.90 0.90% $200 $2.70 - 1.35% $300 $4.50 1.50% $400 $6.30 1.57% A clue to the attitude of em-. ployers in the lumber indus- try is found in the recent WEEKLY EARNINGS ASSUMED $104.80 104.20 105.20 127.20 105.20 # ‘NM has not joined his Company plan. from 1 January 1966, the figures will be as show. settlement for the pulp and paper section. A contract provision deal- ing with pensions appears now in the Standard Labour Con- tract 1965-66 negotiated by the United Papermakers and Paperworkers with some of our employers, which did not appear before. This provision “notches in” the company plans with the Canada Pen- sion Plan. This clause may roughly be interpreted as a scaling down ot both contributions and.re- tirement benefits for pension- able earnings under the $5000 ceiling. It also provides for optional contributions of 4% of earnings above the $5000 ceiling to yield annual pen- sions under prescribed con- ditions. A Joint Union-Management Committee is established to meet once a year and deal with information about the plan, but with the proviso that the Company reserves unto ASSUMED ANNUAL EXPECTED GOVT. PENSIONS ($104.17-CPP) ($_75,00-OAS) $2,150 ANNUAL EARNINGS ACCRUED PENSION AT 31/12/65 $5,450 $424 5,418 2,150 $,470 2,150 6,614 2,150 5,470 2,150 itself the right to select the actuary, trust company and/ or insurance company, con- sultant and the method of funding. As a guide to IWA mem- bers who may be pondering this question, the WESTERN Canapian LuMBER WORKER publishes the table found above. Five typical cases of sawmill and plywood workers were stated by Local 1-217. In each case the actual earn- ings with steady employment are shown as well as the ac- tual accrued benefits under the company plans. Age and seniority are also given. These figures are then pro- jected to indicate what can be realized in the combined bene- fits of the Canada Pension Plan, the Old Age Security Pension and the company plan al age 65, For instance, employee “A”, aged 31, earns $5,450 a year, if in steady employment. He now has $424 in accrued bene- PENSION AT AGE “ ¥. NO MORE "PULP" TYPE PENSION BENEFITS PLAN BENEFITS EARNED EARNED EARNED $4,118 $3,817 3,561 4,511 $2,574 2,710 3,075 3,788 4,388 4,383 $,320 2,840 2,150 5,104* 2,150 3,654* 2,150 If he participates fits under his company’s plan. He faces three alternatives for pension income if and when he retires at 65. If no more pension is earn- ed under the company plan, his total pension income, com- bining the maximum under the Canada Pension Plan and the Old Age Pension will be $2,574. If his company scales down the benefits of its plan, as in the pulp and paper in- dustry, his combined pension income from the three sources will be $4,118. If he continues to contribute to his company plan at the present rate, as well as to the Canada Pension Plan, he will be able to secure a total pension income of $5,817, This is now greater than his present earnings, but what such a pension will rep- resent in purchasing power 34 years hence, no one can pre- dict. These are the prospects for five sawmill and plywood workers, ee "INTEGRATION" DEBATED NN A recent television in- terview in Vancouver, Hon. Judy LaMarsh, Minis- ter of National Health and Welfare, stated that the Fed- eral Government has no jur- isdiction with regard to the “integration” of the Canada Pension Plan with private company Plans. The Minister indicated that three courses of action were open to companies and em- ployees contributing to pri- vate plans. (1) Where private plans have been non-negotiable, the companies could unilat- erally “integrate” with the CPP in the manner the Federal Government has dealt with the existing pen- sion plans for members of the armed services and the RCMP. Contributions and benefits are scaled down to provide retirement income above the maximum pay- ment possible under the CPP. (2) Companies and em- ployees may agree to “stack” the contributions and benefits of both the private plans and the CPP _to provide substantial re- tirement income well above the maximum payments under the CPP. (3) Companies and em- ployees could agree to ne- gotiate a mutually satisfac- tory schedule of payments and benefits to permit ad- justment of employee and company contributions for lower combined benefits. The Minister predicted that poor pension plans would likely disappear, but that a watchful eye should be kept on the investment already made by employees in satis- factory plans. A review of the situation across Canada indicates that the introduction of the CPP has provoked a wide area of labour-management disputes. Some predict that pension differences will cause strikes in the next 18 months. On the other hand, in some instances, companies and _ employees have already reached agree- ment. Some unions may follow the lead of the United Steelworkers of America. At the recent Steelworkers’ Policy Conference, it was decided to work toward a ’ retirement pension which would give 60-year-old em- ployees with 30 years’ serv- ice, 75% of their best final income before retirement. The Steelworkers have met several company propos- als to “integrate” warded them off. Said the Union’s spokesmen, “Our position is that we won’t tol- erate interference with exist- ing pension plans.” The ma- jor test comes up in next spring’s negotiations with Steel Co. of Canada and Al- _ goma Steel Corp. Integration has been ac- cepted in negotiations for the Eastern Canadian pulp and paper plants. In negotiations between the SIU and the Great Lakes shipping firms, a pension plan had been agreed upon before the CPP became law. It was but has agreed that the maximum pension benefit from the com- pany plans would be $144 a month, but that, when the CPP became effective, the company plan would be cut back to guarantee the same pension benefit as originally accepted. The Oil, Chemical and Ato- mic Workers’ Union has ask- ed for a wage increase of 40 cents an hour in one year. It is now predicted that greater emphasis will now be placed on fringe benefits to include a pension scheme. The Steelworkers will have problems with the Interna- tional Nickel Co. and the In- ternational Harvester Co., as both these corporations set up two recently-revised plans to provide in 1976 benefits close to the level set by CPP in the same year. Members of the Brother- hood of Electrical Workers report that its members are already paying 3% to 5% of their earnings into pension funds and are not willing to pay the additional 1.8% de- manded by the CPP. The Union is trying to persuade them to oppose “integration” on the ground that the cur- rent income tax exemption will offset the bite into the take home pay. Canada’s two major rail- roads are expected to “inte- grate” their pension plans with the CPP to avoid the possibility that pensions will be a bargaining issue next fall. One result is certain in con- sequence of the introduction of the CPP. Unions will de- mand more details from em- ployers on existing plans. Some union leaders charge that employers may be pay- ing less into pension plans than employees because the fund’s investment income may be better than expected and because of employee turnover. RETIREMENT PENSIONS PAYABLE AFTER JAN., 1976 AVERAGE EARNINGS $100 per mo. $ 23 per week fl $25.00 $150 per mo. $ 34 per week [il $37.50 $200 per mo. $ 46 per week faa $50.00 $250 per mo. $ 58 per week jl $62.50 $300 per mo. |i $ 70 per week Maal $75.00 $350 per mo. $ 81 perweek /MGRGNNE $87.50 $400 per mo. $ 93 per week $416.67 and over per mo. $ 96.00 per week CANADA PENSION PLAN $100.00 aaa $104.17 YEARLY eee | PENSION MONTHLY PENSION Source ... William M. Mercer Ltd.