COLUMN: Pension plans and the mail

The looming Canada Post job action, whether it’s a lockout or a strike, boils down to one big sticking point — pensions. The proposal by Canada Post that new employees receive a different pension plan model than existing workers. Current postal workers receive a defined-benefit pension plan, a guaranteed sum of money per month on retirement. New hires would receive a defined-contribution pension plan, which is a guaranteed sum invested per month when they work. The plan’s payout on retirement could be better or worse depending on market forces and performance of the pension fund.

What post office employees receive now is a typical government employee pension. What is proposed is typical of most people who save for their retirement. One cannot fault the Canadian Union of Postal Workers (CUPW) for going to bat for new hires to have the same benefits that existing employees have. Talk to a number of front line post office workers and you may hear that the union is not listening to their members. That they do not want to, or cannot afford to strike and the change in benefits is reasonable as it does not affect them.

In reality, Canada Post’s change from defined-benefit to defined-contribution makes sense. People change jobs more frequently, a career is no longer defined in decades of service. In one decade workers may have two, three or even four career changes. The job market is more fluid. As Canada Post sees letter mail service decline, the roles within that Crown corporation shift. Having a defined contribution plan that can move with people makes sense.

It is an idea that should be instituted throughout the federal, provincial and municipal civil service. For the most part it is now in the private sector. Pension plans, or investments, that move with the person from job to job. With the exception of government jobs, life-long, single employer careers are gone in Canada. There are few “plant jobs” in existence anymore.

Having government and Crown corporation workers receive a different standard of pension from the rest of Canadians reinforces an “us and them” mentality, a national double standard.

In the end, a move to a national pension plan option, such as an expanded Canada Pension Plan (CPP) where workers can direct their contributions would be ideal. Note the word option. A government-run pension plan should not be the only option, people have the right to choose in how their retirement investments are made, including opting out of the CPP and having those contributions directed towards a private fund.

For contract workers, including Canada Post contract workers who receive no pension contributions, it would enable them to save for their retirement. Meanwhile moves from private to public sector, or the opposite, would be less complicated by having a standard type of pension system that moves with the individual.

In the 1990’s, students were told to expect to have three-to-five career changes in their lifetime. Now, it is more like three-to-five job changes in a decade. By changing government and Crown corporation pension plans to defined contribution, the civil service would reflect the reality and fluidity that is the job market in Canada.