[Locke]

Originally Posted by iggy_oi

Yes it will protect taxpayers from any potential liability on the new plan, I mentioned that in my post. The problem has to do with who the new plan will not protect from the deficit and how.

Hopefully this explains what I mean:

Introducing the new plan will, as I've mentioned, create a two tier system which has the potential to negatively impact the old pension plan members by not only allowing it to potentially bankrupt itself/be at the mercy of a bail out decision, but also by having its defined benefit be altered in future negotiations without its members approval as they lose the voting majority. So the union takes a risk, the tax payers take a risk although how much is undetermined, and Canada post assumes zero risk.

The new plan will also not put any measures in place to address or stabilize the old plan, the deficit could grow, shrink if it grows the funds could go bankrupt, so again the union takes a risk, the tax payers take a risk, and Canada post assumes zero risk.

Do you see the who is coming out ahead no matter what scenario plays itself out? Canada post will be washing their hands of the mess they played an equal part in creating and assume no responsibility for trying to fix it long term and protect both its employees and the tax payers from having to handle the fallout. That is what I feel they are after, they don't care if tax payers or there members suffer, they are just looking to make sure they don't suffer.

1. This is incorrect. The Government has entered into a contract with a group of workers to provide a Defined Benefit. By nature a defined benefit is....a benefit...that is defined. You get what was promised and the deal cannot be changed retro-actively.

When its with a company if theres no money there then theres a process, but this is the Government, they cant welch on the deal. That money will come from somewhere, it has to.

2. Again, correct and incorrect. The lack of any kind of failsafes or guarantees in regards to the Old Pension Plan arent omitted by ignorance or lack of foresight, they're omitted due to lack of need. That plan is going to get bailed out by taxpayers. Thats a thing thats going to happen. This isnt trying to 'screw' the Union or the employees, this is triage. Stem the bleeding, this far no farther.

3. Yeah...who is coming out ahead? Current Postal Workers. They're going to be forced to accept the two-tiered pension system because the secret on Government-backed and Guaranteed Defined Benefit Pensions is out. They're untenable and unsustainable. Current Postal Workers are going to get paid, they're going to get their cushy pension and they're going to be damned near unfireable and they're going to be given incentives (read: money) to accept, and in exchange they're going to sell out their brother future Postal Workers because: "Screw those guys I dont know so long as I get mine!"

4. Yeah, read that last sentence again. No one is doing any of this out of altruism.

Originally Posted by Resolute 14

Canada Post may be a Crown Corp, but when you say taxpayers take the risk and not Canada Post, that is only a half truth. We are on the hook if nothing changes and the problem only gets worse. So Canada Posts's loss is our loss, but so too is Canada Post's gain our gain. It is not a three way scenario like you would like to create.

Also, your final sentence applies just as strongly to the union. They don't care if tax payers suffer, so long as they don't.

In terms of being at the mercy of future politics, I'm not so sure. If Locke is still reading this thread, he might be able to explain some of the financial details and responsibilities. However, I do know that when Chretien raided the pension surpluses in the 90s, several unions sued about it. The SCoC ruled that the government had the right to that because its actions did not deny the plan members anything they were promised. The corollary to that is that if Canada Post/the government were to take a step to try and deny that pension, the courts would slap down the government. I think it is extremely safe to say that the existing plan members are safe.

There is absolutely no question about it. As I explained before:

A Defined Benefit is....a Benefit...that is Defined.

It is a Government promise, any argument that Postal Workers who retire and see an underfunded pension fund are going to be thrown out onto the street is ridiculous and disingenuous. Any and all shortfalls will be covered.

This is the Crux of the whole problem.

A retirement plan is typically: personal contributions + employer matching (if there is any) + growth over time = retirement savings.

The issue with DB plans is that you are guaranteed a sum based on established criteria (typically average salary of 'x' number of final years in perpetuity) whether that prior equation justifies it or can afford it or not. In a DB plan a third party has agreed to cough up any difference.

A Defined Benefit Pension Plan assumes a great number of things, but at the end of the day it is a Guarantee of retirement income based on established criteria.

For instance, lets take one we can all love: Old Age Security.

The criteria: Canadian Citizen with 'X' number of years of residency that reaches the age of 65 who does not exceed an annual income of $71,592-$116K.

The Benefit: ~$6500/year (<- it changes from year to year)

The contribution? .....

Originally Posted by iggy_oi

There is nothing that guarantees the taxpayers will be forced to bailout the pension plan if it cannot cover its liabilities, I think you can agree with that statement. Yes there would likely be a court hearing on the matter, but to assume that a legal precedent has been set because another case from what will at that time have been potentially a half century prior and a different situation entirely that just so happened to involve pension funds is a pretty big reach in my opinion. If a legal expert tells me differently or if there are other such precedents that have been set I'll reconsider my opinion.

Yes the union clearly and rightfully so has their members interests as their top priority, but I haven't seen anything reported that they have come forward with a proposal that puts only Canada post and the taxpayers at risk while they absolve themselves from the issue all together. Do you really think they don't care if the deficit doesn't get fixed and are assuming that they will get a guaranteed bailout one way or another? Each postal worker has more at risk than any tax payer or Canada post in this issue.

1. That assertion is patently false so no, I do not agree.

2. The Union absolutely has its current member's interest as their top priority and at the moment the Union is well poised to come out of this fiasco looking like Unicorns pooping rainbows and bleeding printer toner.

As I indicated earlier, current postal workers are going to make out like bandits, just so long as they dont have too much of a conscience over their 30 pieces of silver.

Originally Posted by iggy_oi

You're of the opinion that a group of workers who's pension plan has a $6billion dollar deficit don't care whether or not it gets fixed? That they also it as not their problem?

You do realize that your post translates to: I really think they don't care about whether or not they have an income after they stop working and they don't care about looking for ways to ensure they do or at least have a better chance to have one. As is often the case with unions, their members don't see potentially losing 10's of thousands of dollars that they have invested their earnings throughout their entire career for as their problem. Until forced?

If that were the case why would they risk getting locked out over this in the first place? They're not being forced to care, by locking them out instead of working on a plan that works for both sides they are effectively being told that the company doesn't care whether they care or not about their at risk retirement savings.

I cant even specifically point out certain parts of this one.

Of course they feel it isnt their problem, the Government literally cannot not pay the agreed pensions.

Finally, if the Unions had any sense they'd take the deal that their current members are more or less perfectly happy with.

So....why dont they? Especially if they have their current members' interest at the forefront of their priorities?

Because right now Postal Workers are the weakest link and everyone knows it.

This is just the first Domino to fall. The CUPW will be taking heat from every other Union that represents Government workers with Defined Benefit plans to fight this tooth and nail and not set a precedent. If the CUPW caves to that pressure they will be doing so at pretty much exactly what Resolute has been saying, conflicts of union representation.

"We the CP brothers cant in good conscience screw our brothers in various other branches of Government work."

And those brothers will be collecting full salary and benefits while their CP brothers walk the picket line for peanuts. For the cause! Once more unto the breach brothers!

Like I alluded to earlier, the secret is out, these Defined Benefit Pension plans are killer and have to be eliminated and as I have been saying for years the best way to do it is to phase them out over time so nobody gets totally screwed.