November 22, 2013 - 15:00
Pension / Letter
Dear Sisters and Brothers,
You may have heard about the difficulties facing our pension plan. I am writing today to inform you of the problems with the plan and what our union is doing. I know this is a tough issue for all postal workers, and I want you to know we will do everything we can to protect our financial future.
The Canada Post pension plan has a $6.5 billion solvency deficit, caused in part by the consistently weak interest rate. Canada Post has informed members and the union it will soon max out on the $2.5 billion letter of credit it has been using to fund this deficit. The Conservative government has informed Canada Post that it will not extend a further letter of credit. Therefore, Canada Post will have to start making special payments of $100 million per month out of its operating budget to cover the solvency deficit as of May-June 2014. Given the magnitude of the deficit and required payments, this could eventually render the corporation insolvent.
Canada Post is in the process of cutting, closing and downsizing its operations. It is already undertaking a massive publicity campaign advocating further cuts to postal service. The corporation could use a pension crisis to make even more dramatic cuts to our jobs and public postal service.
Moreover, we know the Conservative government is no friend of public postal service or postal workers. We know a review of the Canadian Postal Service Charter will take place in 2014. The dire pension situation could result in the Conservative government allowing any and all cuts proposed by the corporation. Furthermore, the government could act unilaterally on the pension difficulties.
Given this difficult situation, CUPW’s National Executive Board has decided to have discussions with Canada Post. Our ultimate objective is to protect our defined benefit pension plan.
CUPW is exploring options to protect the viability of our pension plan. We are working with actuaries and lawyers who specialize in pension plans to look at what’s possible. No decisions have been made. The union and Canada Post have agreed to a working committee to address the realities of the pension plan.
These discussions are important to each and every one of us. More information will be provided to you through bulletins and the CUPW website (www.cupw.ca) as it becomes available. Be sure to look over the enclosed fact sheet and questions and answers as they will provide you with an overview of this very complicated issue. If you want details on your specific pension benefits, be sure to visit the following website: https://cpc-pension.benefitcenter.com.
Rest assured that we will continue to fight for a long-term solution that will protect our pension plan and we will keep you informed of our progress.
National Executive Committee
Regional Executive Committees
National Union Representatives
Regional Union Representatives