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New hires will receive part of their pension benefit from the existing DB plan under a reduced formula, and part from a DC plan.
Toronto (21 Sept. 2011) - An arbitrator has delivered a decision on pensions, one of the key issues behind a strike by Air Canada customer service staff last June.
The decision provides that a hybrid pension scheme consisting of both defined contributions (DC) and defined benefits (DB) will apply to new hires, according to a news release issued by the Canadian Auto Workers (CAW), the union which represents Air Canada’s 3,800 customer service agents. The decision reflected the proposal put forward by CAW.
CAW members went on strike for three days at Air Canada in mid-June after negotiations broke down over demands for cuts to existing pensions, the elimination of defined benefit pensions for new hires, and other economic issues. Just hours after the strike began, the federal government prepared legislation to force CAW members back to work. Before the legislation was debated, the CAW and Air Canada reached an agreement on June 16. The government passed similar legislation forcibly ending the lockout at Canada Post shortly thereafter.
The pension issue remained unresolved and the parties referred it to arbitration.
Ken Lewenza, CAW president referred to the arbitrator’s decision as “an extremely important ruling which demonstrates that no employer, regardless of how large or small, should believe they have the unmitigated right to destroy a worker’s retirement security.”
The new plan will see new hires receive part of their benefit from the existing DB plan under a reduced formula, and part from a DC plan, contributed to by both workers and the employer.
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