|
Action memo
To:
All OPSEU members in the OPSEU Pension Trust
pension plan
From: Warren (Smokey) Thomas,
President
Date:
October 25, 2016
Re: OPSEU
to file for interim relief from retiree
benefit changes if talks fail
Dear
friends:
For
two years now, your union has been meeting
with the Ontario government over the latter's
plan to make members of the OPSEU Pension
Trust (OPTrust) pension plan pay half the cost
of their benefit premiums when they retire.
Our
first meeting was on December 17, 2014. In
total, we have held seven negotiating sessions
with government representatives. The last
meeting, on October 17, 2016, included the
minister, Treasury Board President Liz
Sandals.
For
close to two years, we have been telling
government representatives that benefits for
retirees are part of the deal between the
government and its workers. As such, they
cannot be changed unless both parties agree.
This
is the argument - and it is a strong argument
- that we have been making from the start.
More than 1,400 members have filed grievances
about the government's plan, and the union has
filed a policy grievance. The government was
unsuccessful in trying to block those
grievances from being heard at the Grievance
Settlement Board (GSB); the GSB has already
ruled that those grievances should go forward
to arbitration, with hearings scheduled to
begin in the spring of 2017.
Unfortunately,
OPSEU members who are eligible to retire and
worried about their benefits are making
decisions now, not next year. The government
says that, in order to continue to receive
retiree benefits without paying premiums,
OPTrust members must retire and receive at
least one pension cheque in 2016. This means
they will have to decide whether to stay or go
no later than the end of November.
This
puts many members between a rock and a hard
place. In many cases, they may decide to
retire earlier than planned in order to avoid
the extra cost for benefits. Then, if our
grievances are successful, they will find
themselves out of a job, all because of something
that the government did not have the right to
do.
This
is unfair in every way. But in our
conversation last week, Treasury Board
President Liz Sandals appeared unmoved by our
arguments. That is why OPSEU has instructed
counsel to file for "interim relief"
from the government's plan for retiree
benefits if negotiations (which the minister
committed to) fail to produce an acceptable
resolution.
If
granted, the interim relief sought would
require the government to postpone its plan
for retiree benefits until such time as 1) the
parties come to an agreement, or 2) the GSB
rules on the relevant grievances. We are
hopeful that the GSB will be able to rule on
our interim relief application in short order.
If that happens, OPTrust members will be able
to hold off on their retirement decision so
they can make that decision based on facts,
not possibilities.
Fighting
back against unfairness
As
mentioned above, the government's plan to make
members of the OPTrust pay half the cost of
their post-retirement benefits breaks a
longstanding covenant. But that's not the only
reason it's unfair. It's also unfair because
it hits the lowest-income retirees the
hardest.
Under
the government's plan, retired single
individuals will have to pay $900 a year for
benefit coverage. Retirees with families will
pay $1,600. This is a big amount: the average
pension in the OPTrust pays under $21,000 a
year. So OPTrust members will have to pay
somewhere between four and seven per cent of
their income to maintain their benefit
coverage.
But
here's the issue: the government also plans to
make members of the Public Service Pension
Plan (PSPP) pay the same dollar amount for
retiree benefits. The PSPP is the management
pension plan, and PSPP members are
considerably richer than OPTrust members. Many
high-ranking deputy ministers and other top
managers will retire with pensions worth more
than $100,000 a year. Yet when they pay half
the cost of their retiree benefit premiums,
they will pay $900 for individuals and $1,600
for families - exactly what people earning
five times less will pay.
The
government's plan is regressive. In
negotiations, OPSEU has proposed a couple of
ways to deal with this unfair approach.
Back
in 1993, the Ontario government brought in its
Social Contract Act as a way to cut public
sector payroll costs by 5 per cent overall.
This meant pay cuts for many OPSEU members.
However, the NDP government of the day agreed
that the Social Contract should not apply to
any worker earning less than $30,000 (just
under $46,000 in today's money). We've told
the government that, if it would agree to a
suitable low-income cutoff, we would find a
way to make its plan work.
We've
also suggested the government could simply
adopt a sliding scale for benefit premiums,
where employees at the top of the pension
income pyramid (e.g., long-serving Deputy
Ministers) would pay the most, and those at
the very bottom would pay nothing.
Instead,
the government prefers to coddle PSPP members
while OPTrust members pay through the nose.
To
fund their pensions, OPSEU members in OPTrust
pay 11 per cent of their income above their
Yearly Maximum Pensionable Earnings. PSPP plan
members pay 9.5 per cent. If this
government were concerned about fairness, it
would raise PSPP contributions to 11 per cent
first before it even considered
changes to post-retirement benefits.
Sadly,
fairness does not appear to be high on this
government's agenda. Premier Kathleen Wynne
has styled herself as the champion of better
pensions and equality for women. This is a
chance for her to demonstrate that commitment.
Her government is attacking the retirement
income - and the health - of a workforce that
is two-thirds female. Her government should
change course now.
Thank
you for your patience as we continue to
advocate on behalf of all OPTrust members.
In
solidarity,
Warren
(Smokey) Thomas
President, Ontario Public service Employees
Union
P.S.
If you are considering retiring early as a way
to avoid paying for your post-retirement
benefits, there is, unfortunately, no advice
your union can give you to aid in your
decision. Watch your email and the OPSEU
website for updates on our interim relief
application, but make sure you do not miss
your own application deadline should you
decide to retire.
c:
Liz Sandals, President of the Treasury Board
Reg Pearson, Associate Deputy Minister,
Bargaining
and Compensation
OPSEU Executive Board
|
