LETTER TO ALL PLAN MEMBERS FROM LL 1542 PENSION COMMITTEE
The purpose of this letter is to try to help clarify on the INFORMATION STATEMENT that was released by the Company on the payment extension for the Defined Benefit Pension Plan.
As what is stated and voted on in our 2013 – 2019 CBA: The parties agree to endorse the pension funding relief measure as permitted under the Ontario Pension Benefits Act of amortizing the solvency deficit for the defined benefit plan over a 10-year period.
This was done in order to allow the Company to spread the solvency payments across a 10-year term for financial reasons instead of a five-year term. This Plan is an important part of the benefits package offered to our members, and, we are committed to ensuring that Plan members, former members and retired members receive their full entitlement under the Plan. However, the normal funding requirements for the Plan would place significant strain on the business, which could jeopardize the ongoing operations of the Company.
This will be the third time that the Ontario government has provided temporary solvency funding relief to these plans. Our plan, as of February 2017, is in a lot better shape than it was in 2013 & 2015 when these extensions were used (today 82% funded / transfer ratio). Hopefully with stable interest rates and a healthier economy, we will see even better results in the next couple of years.
This newest extension that is being offered to the Company, will in no way effect our pensions today or in the future, it is just allowing some welcome relief to the Company in order to help stay viable in today’s marketplace. It is important to know that your pension committee, is in favor of the Company using the extended payment term and hope that all its members support it as well. So please show your support, and allow the Company to continue down this path and help keep our Company and pension plan stable and healthy for years to come.
For more information, please read Solvency Funding Relief for Private-Sector Pension Plans Extended – 2016 Measures (https://www.fsco.gov.on.ca/en/pensions/actuarial/Pages/2012-solvency-funding-relief.aspx)
(June 3, 2016, O. Regulation 161/16) described on the FSCO’S website. Every employer who establishes an employment pension plan that is subject to the Pension Benefits Act (PBA) must submit the pension plan to FSCO for registration. Employment pension plans provide an important source of retirement income for employees and their families. The mandate of FSCO’s Pension Division is to administer and enforce the PBA and regulations to protect the rights and benefits of pension plan members and regulate pension plans in a fair, effective, efficient and responsive manner.
Union Pension Committee