On Thursday September 13, COPE 491 joined CSU and the Employer at the table to ensure that all three Settlors could reach a settlement – the pension settlement was signed Friday afternoon.
Here’s what the Pension Settlement entails:
- Retirees will receive a catch-up adjustment of their base pension to make up for the years without an indexing adjustment. A person that retired Jan 1, 2010 or earlier will see a base increase of 9.07 % (but they will not receive a retro payment).
- January 1, 2018, retirees get an indexing adjustment of 100% of CPI and a retroactive payment for the period from January 1, 2018 to the date of the adjustment.
- The conditions for the indexation benefit formula negotiated in 2007 have been replaced to improve the likelihood of delivering this benefit in the future. The old solvency threshold of 105% has been removed. There is now no solvency threshold. The formula ensures that future plan surpluses are fairly shared between current and future retirees, while making it more likely that indexation will be at 100% of CPI.
- The Employer will contribute an additional 1% to the pension plan every year the plan is funded at 130% or lower. Unlike previous employee and employer contribution increases, this 1% is specifically earmarked for indexing and cannot be absorbed by normal plan cost increases. The plan is currently funded at 129% and the pension improvements we have negotiated will reduce the surplus, so the Employer will start contributing the additional 1% as of Jan 1, 2019.
- when guaranteed indexing was looked at the long-term projections showed that the guarantee would actually unfairly impact future retirees and active members. The projections also showed that even with a market drop such as 2008, the improved conditional indexing formula would deliver indexing above 50% of CPI.
- CSU’s actuary is working with the Employer’s actuary on a presentation to explain and illustrate the indexing formula. The presentation will be available shortly.
- In addition, the last tier of the Bridge has been removed. Employees hired after May 16, 2007 will no longer need 15 years of service to get the full value of the $8,000 Bridge. The service requirement is now 10 years for everyone.
- There is a provision that allows the Employer to recover special payments from future surplus (Banker’s Note). The Employer has made special payments over the last few years worth $6 million. They have agreed not to recover those monies prior to the conclusion of the next round of bargaining.
Please note: This will be discussed with the Executive as per the COPE491 Bylaws. A ratification vote will be set up shortly, please ensure that your correct email address is with your RVP – the vote will take place with Big Pulse. If you have any questions please contact your RVP and they will be in contact with the Bargaining Committee.