Postal strike and Air Canada stike

[Wilber]

I could also add the Air Canada Act itself which among other things requires the company to print everything in both languages, including technical manuals. Something not required of any of their competitors.

[TimG]

In fact, it was the company that had not been puting away for the future, the employees had been contributing the whole time.

You are over simplifying the issue. There are rules that prohibit DB plans from building up large surpluses. They must be resolved by either reducing contributions or increasing benefits. The companies reduced contributions. If you don't like the rules on surpluses you should take it up with the regulators.

You also forget that it was the unions who played the DB shell game as well. It allowed them to pretend they had won more than they really had. In any case, DB plans have to go. They are not sustainable in a world where people live to 85 plus. Companies need to be free to focus on their core business. Providing retirement benefits to ex-workers is almost never a core business.

[Wilber]

You are over simplifying the issue. There are rules that prohibit DB plans from building up large surpluses. They must be resolved by either reducing contributions or increasing benefits. The companies reduced contributions. If you don't like the rules on surpluses you should take it up with the regulators.

Some of them did, but of course the same could be said of the corporations.

You also forget that it was the unions who played the DB shell game as well. It allowed them to pretend they had won more than they really had. In any case, DB plans have to go. They are not sustainable in a world where people live to 85 plus.

They need to be changed and maybe retirement ages have to be as well, that doesn't necessarily mean they have to be eliminated.

Companies need to be free to focus on their core business. Providing retirement benefits to ex-workers is almost never a core business.

Providing retirement benefits for ex workers is a contract they entered into.

[TimG]

They need to be changed and maybe retirement ages have to be as well, that doesn't necessarily mean they have to be eliminated.

I have no issue with a seperately managed investment pool that is independent of the company. DB plans that are a liability for companies must go. All they do is give the newer competitors a huge advantage.

Providing retirement benefits for ex workers is a contract they entered into.

Sure. And if the company goes under the pensioners will be in line along with all of the other creditors. The issue here is finding ways to keep the company running.

[Wilber]

Sure. And if the company goes under the pensioners will be in line along with all of the other creditors. The issue here is finding ways to keep the company running.

Something we agree on but that is something they need to do together, not with one side dictating to the other. No doubt there are ways of making DB pensions work better and in a way that reduce risk for both parties. Those should be investigated to the full before they are just ditched.

[RNG]

This has been debated forever. Lets face it, DB benefits are effectively a Ponzi scheme, based on the premise of a continuously increasing young population. The whole baby-boomer thing screwed that. I am at the lead of the baby-boomers, but I saw it coming and arranged my affairs to counteract that. If others didn't, that's because they were dumb and should have done better. So there is no way my kids and grandkids should be stuck paying for their stupidity.

[TimG]

No doubt there are ways of making DB pensions work better and in a way that reduce risk for both parties.

I proposed a way several times: the DB plan is managed by the union. The employees are responsible for any deficits but benefit from any surpluses. The company makes contributions with each paycheck but after that it is not its problem.

[cybercoma]

Sure. And if the company goes under the pensioners will be in line along with all of the other creditors. The issue here is finding ways to keep the company running.

More like the pensioners will get in line BEHIND the other creditors:

"Toronto pension specialist Hugh O'Reilly says workers are often out of luck. Canadian bankruptcy law puts employees near the bottom of the creditors list. When all the assets are sold off, the employees are way down on the creditors list."

From: http://www.cbc.ca/news/background/pension/

If you consider that pensions are deferred wages paid to employees as part of what they agree to exchange for their labour, this is unacceptable.

If you believe that labour has no value and that companies are doing people a favour by giving them a job then there's nothing that can be said to explain how disastrous this pension situation is.

[TimG]

If you consider that pensions are deferred wages paid to employees as part of what they agree to exchange for their labour, this is unacceptable.

Not at all. Employees knew that they would be last in line when they agreed to defer wages in a DB plan so they really have no right to complain. There is a solution: get DB plans off the books of companies and leave it to the unions to fund them with employee contributions. It is a win-win for employees and companies.

[cybercoma]

Employees knew that they would be last in line

I don't think they did and until you show me otherwise, I think it's more likely that most employees thought their pensions would be secure. Moreover, in the event of a company going under, I'm willing to bet most people think that they would be first in line for their pensions, since it's deferred wages or 'forced savings'. I know plenty of people in Windsor and Hamilton that were utterly shocked when they lost their pensions close to retirement and there's nothing that can be done for them. It's a damn tragedy and you're completely heartless if you think it's anything but.

[TimG]

I don't think they did and until you show me otherwise, I think it's more likely that most employees thought their pensions would be secure.

Then it is the union's fault for not education them on the nature of the agreement.

I know plenty of people in Windsor and Hamilton that were utterly shocked when they lost their pensions close to retirement and there's nothing that can be done for them. It's a damn tragedy and you're completely heartless if you think it's anything but.

And I know people who spent their entire lives running small businesses only watch them crumble under the weight of social change and big box stores. They are scrambling during retirement as well. Are you seriously arguing that the people you know are more deserving of sympathy than the entrepreneurs that tried yet failed? What about the masses of unskilled people that did not have to right contacts to get them a cushy unionized job? Don't they deserve sympathy? Edited June 20, 2011 by TimG

[Wild Bill]

Then it is the union's fault for not education them on the nature of the agreement.

And I know people who spent their entire lives running small businesses only watch them crumble under the weight of social change and big box stores. They are scrambling during retirement as well. Are you seriously arguing that the people you know are more deserving of sympathy than the entrepreneurs that tried yet failed? What about the masses of unskilled people that did not have to right contacts to get them a cushy unionized job? Don't they deserve sympathy?

Tim, there's one perq at big union factories that is not generally known. When layoffs come, the guys with the MOST seniority are laid off!

I first heard about this 30 years ago at Massey Ferguson, later Varity Corp, in Brantford. I had it confirmed last summer that it is still the practice at General Motors in St. Catherines. There are many more such places.

You see, there are two classes of citizens as far as the EI office is concerned. If you are a non-unionized claimant, if you make a few dollars on the side while collecting EI you must claim it on your report cards. If the amount exceeds some rather low limit then the extra is deducted from your EI cheque.

However, if you are lucky enough to be a union worker at a company such as Ford Motors or whatever the company you work for will give you what is called a "sub" to bring your weekly earnings up from the EI level to 90% of your normal takehome pay!

The unions fought and won the right to have the older guys with the most seniority to take the layoffs. With the "sub" in effect they go on a paid holiday!

The benefit to the newer workers is that they get to accumulate more time for their own seniority.

I can remember as a young lad having to watch how much money I made cutting lawns while on pogey, for fear of exceeding the limit. I never knew at the time that I did not have the same rights as a union worker with my government.

Once again, it shows that "some pigs are more equal than others."

[TimG]

I can remember as a young lad having to watch how much money I made cutting lawns while on pogey, for fear of exceeding the limit. I never knew at the time that I did not have the same rights as a union worker with my government.

I did not know that. What a disgusting practice. I had to go on EI for awhile. It was peanuts and when I found paying work 6 months later it was more than taxed back. Now I am glad I am not forced to contribute.

[Smallc]

Bellingham airport is booming and expanding to handle all the Canadian traffic heading south because YVR is so expensive.

It's worth pointing out that YVR is also booming and expanding (along with pretty much every other major airport in Canada). Air travel has to become self sustaining. Tax payers should not be subsidizing air travel. They're doing this far more in the US than in Canada. That can't last forever.

Edited June 20, 2011 by Smallc

[Wilber]

It's worth pointing out that YVR is also booming and expanding (along with pretty much every other major airport in Canada). Air travel has to become self sustaining. Tax payers should not be subsidizing air travel. They're doing this far more in the US than in Canada. That can't last forever.

If Canadian air travel has become self sustaining, why is its biggest cash cow in so much trouble? Oh, I forgot, it's all the fault of nasty unions.

American carriers don't even fly from Vancouver to Honalulu any more but they do out of Bellingham, full of Canadians. Perhaps we shouldn't build roads, bridges or subsidize ferry systems either. Why should I subsidize someone to take a boat to Vancouver Island or Newfoundland.

Edited June 20, 2011 by Wilber

[Wilber]

I proposed a way several times: the DB plan is managed by the union. The employees are responsible for any deficits but benefit from any surpluses. The company makes contributions with each paycheck but after that it is not its problem.

That is an idea worth considering and should be for companies starting a pension plan. How do you make the transition with existing plans? Do you put the unions on the hook for all the contributions and their earnings that companies should have been making over the years but weren't?

[Bonam]

Gah, I would hate to have a retirement plan managed by a bunch of union crooks. What a horror story that would be. So glad I'm in a profession that typically works non-unionized.

[Wilber]

Gah, I would hate to have a retirement plan managed by a bunch of union crooks. What a horror story that would be. So glad I'm in a profession that typically works non-unionized.

Existing laws concerning registered plans prohibit the companies or unions themselves from managing them. Nothing much needs to change in that respect.

Edited June 20, 2011 by Wilber

[TimG]

That is an idea worth considering and should be for companies starting a pension plan. How do you make the transition with existing plans? Do you put the unions on the hook for all the contributions and their earnings that companies should have been making over the years but weren't?

Obviously it would be in the companies interest to make up the existing deficit if that gets the plan off its books so I assume the union would be taking over a plan that is balanced. However, the companies contributions would likely go down because a mandatory payment every payroll is more expensive than a DB contribution.

[Wilber]

However, the companies contributions would likely go down because a mandatory payment every payroll is more expensive than a DB contribution.

Precisely why companies liked the idea of DB pensions in the beginning only to be bitten in the ass by them in the end.

[TimG]

Precisely why companies liked the idea of DB pensions in the beginning only to be bitten in the ass by them in the end.

To be fair, the world was different in the 50s and 60s. No one really anticipated the changes that we have seen.

[Wilber]

To be fair, the world was different in the 50s and 60s. No one really anticipated the changes that we have seen.

It is just being truthful. In the beginning, companies liked DB plans better because they were cheaper. Unions liked them better because they were DB. I don't blame either of them them for that. It's just true. Neither of them worried too much about looking ahead, they just hoped things would work out.

Bottom line is, millions of seniors on social assistance is not going to be a good thing for anyone, regardless of whether they happened to be union, non union or self employed, so we better start looking for positive solutions for everyone instead of being pissed because someone else might have something we don't. Much better a company plan paid for by the employees and employer to look after people in their old age with a reasonable standard of living, than taxpayers having to do it on a subsistence level.

Edited June 20, 2011 by Wilber

[TimG]

Much better a company plan paid for by the employees and employer to look after people in their old age with a reasonable standard of living, than taxpayers having to do it on a subsistence level.

It is not better if the cost of the plan strangles the company and lets its foreign competition grab market share. There are many companies now that have more retirees than employees. That is not sustainable by any stretch of the imagination.

[Wilber]

It is not better if the cost of the plan strangles the company and lets its foreign competition grab market share. There are many companies now that have more retirees than employees. That is not sustainable by any stretch of the imagination.

It is better and ways have to be found to make plans viable in the future. Company pension plans can only be part of the solution. Blaming one part or one group is a fools game. We need to look at all kinds of alternatives, private, corporate and government, retirement age, you name it. The alternative is massive social assistance programs or generations of centenarian dumpster divers. These problems are not isolated to Canada, we are not the only country struggling with aging populations that are living much longer. Unless you want to start euthanizing people when they reach a certain age, we have to find ways.

[Smallc]

If Canadian air travel has become self sustaining, why is its biggest cash cow in so much trouble? Oh, I forgot, it's all the fault of nasty unions.

You know that I'm talking about security and property costs. US airports, private corporations, are exempted from paying many taxes, and so the general citizenry is on the hook. I'm not generally in Cavour of that kind of thing. Americans have a huge tax hole that they can't afford. We don't, and so quite frankly, I'm not in a hurry to in any way follow their lead. We have a modern democracy, and we need to pay for it.