Monday October 31 2022

  1. The Canada Post Defined Benefit Pension plan covers all permanent full and part time letter carriers, MSCs, clerks, RSMCs (who have routes  over 12 hours a week), clerks, mail handlers, dispatchers, technical services, and RSMC Permanent Relief. In a limited number of situations, it covers temporary Urban Operations workers who are covering a single known in advance assignment of six months or more.
  2. CUPW has successfully resisted rollback demands from Canada Post that would have made new hires part of a Defined Contribution Pension Plan. New hires, in both the CUPW Urban Operations and RSMC bargaining Units (who meet the criteria outlined in point one) are covered by the Canada Post Defined Benefit Pension Plan. New hires in some other Canada Post bargaining units are part of a less secure pension plan –a Defined Contribution Pension Plan. 
  3. A Defined Benefit Pension Plan is the most secure type of pension plan. Under a Defined Benefit Pension Plan the monthly pension you receive is predetermined by a formula based on the amount of time you have contributed to the pension plan, your highest average earnings, and is some cases your age. It is not based on investment returns, or the state of the economy.
  4. Our Pension Plan is our deferred wages. We take home less money because we make contributions to the Canada Post Defined Benefit Pension Plan. And Canada Post also contributes to the Pension Plan on our behalf.
  5. Our Canada Post Defined Benefit Pension Plan:
    • Provides a monthly retirement pension for the worker who makes contributions to the pension plan.
    • Provides for a survivors’ pension to the spouse and eligible children of the pension contributor in the event of the death of the pension contributor. This is both before and after the pension contributor retires.
    • Provides for early retirement on medical / disability grounds. A person must apply for and medically qualify for this and there are certain age restrictions. 
  1. Our Canada Post Defined Benefit Pension Plan is indexed to keep up with the cost of living.   Generally, in January, retirees receive an increase in their monthly pension to keep up with the cost of living. For example, between 2012 and 2022, retirees’ pensions increased by approximately 18% due to indexing.
  2. CUPW members are not the only people in the Canada Post Defined Benefit Pension Plan. Workers in other bargaining units at Canada Post and supervisors and managers are all part of this pension plan. Different rules may apply for them.
  3. If you started contributing to the Canada Post Defined Benefit Pension Plan before December 21, 2012, you can retire from Canada Post without a penalty (having your pension reduced because you are retiring early) if you have: 
    • Reached 55 years of age and contributed to the pension plan, whether as a full timer, part timer or RSMC for 30 or more years OR
    • Reached 60 years of age and contributed to the pension plan, whether as a full timer, part timer or RSMC for two or more years 
  1. If you started contributing to the Canada Post Defined Benefit Pension Plan after December 21, 2012, you can retire from Canada Post without a penalty (having your pension reduced because you are retiring early) if you have: 
    • Reached 60 years of age and contributed to the pension plan, whether as a full timer, part timer or RSMC for 30 or more years OR
    • Reached 65 years of age and contributed to the pension plan, whether as a full timer, part timer or RSMC for two or more years 
  1. Our Canada Post Defined Pension plan is a service purchase plan. This means the longer you work and contribute to the pension plan (up to a maximum of 35 years), the higher the amount of your monthly pension will be. Someone who retires from Canada Post after contributing to the pension for 35 years will have a higher pension than someone who retires after contributing to the pension for 30 years.
  2. As of the last valuation, our Canada Post Defined Benefit Pension had a going concern surplus of $4 .8 billion dollars. In this type of valuation, the auditors base their assessment on the assumption that the pension plan will continue and determine if there is enough money in the plan to pay the pensions of all retirees and current workers. Our pension plan has enough money. In fact, according to the last valuation, as per the going concern valuation, the plan was over 119 % funded.
  3. Canada Post has historically tried to scare us by talking about the Canada Post Defined Benefit Pension Plan solvency deficit. A solvency deficit is a valuation where the auditors base their assessment on the very unlikely assumption that the pension plan will wind up and that the plan must somehow cover the pensions of all retirees and current workers. In the 2021 valuation, the plan had a $4.9 billion dollar deficit based on a three-year average. The valuation also said that an increase of 1% in the discount rate (essentially the long-term interest rate) would decrease the solvency deficit by $5.9 billion dollars. 
  4. When Canada Post tries to scare us by talking about the solvency deficit, we need to respond that the going concern valuation shows we have a surplus.
  5. Even though the number of retirees receiving a monthly Canada Post Defined Benefit Pension has continued to increase, the assets of our pension plan have also increased. In 2020, the plan had assets of $29.6 billion. In 202,1 the plan had assets of $32.3 billion.
  6. CUPW has some concerns about some of the investments in the Canada Post Defined Pension Plan. For instance, the plan has invested in some private for -profit – long – term care facilities. CUPW does not want our pension fund making profit off vulnerable seniors.
  7. We need to always work to protect our pension!

 

 

 

 

 

 

CUPW President

In solidarity,

Jan Simpson