Air Canada’s flight attendants will be deciding whether to implement a new hybrid pension plan for new hires when they vote on the tentative agreement reached by their union earlier this week.
The Canadian Union of Public Employees (CUPE) members will be approving the idea to place new hires on a combination of a defined benefit plan and a reduced-cost defined contribution plan, according the Globe and Mail. The newspaper reports that the flight attendants’ plan will be modeled on the pension plan outlined in the ruling by arbitrator Kevin Burkett for Air Canada’s 3,800 sales agents and customer service representatives.
In June 2011, the sales agents and customer service representatives ratified a new collective agreement, but sent the future of pension plans to the arbitrator. Burkett chose to implement the plan that was proposed by the Canadian Auto Workers (CAW), which maintains the defined-benefit pension plan for new hires, along with implementing a defined-contribution portion to their plan.
“In the event that there is disagreement as to the application” or interpretation of the CAW’s hybrid pension model, “the issue will be referred to arbitrator Burkett,” reads a copy of CUPE’s agreement, obtained by the Globe.
Similarly, RBC announced to its employees that new hires will no longer have access to the company’s defined benefit plan, according to a Globe report.
The bank’s chief human resources officer, Zabeen Hirji, sent an internal memo to employees announcing the changes, which came about after a review of the bank’s retirement program.
As of Jan. 1, 2012, the DB plan will no longer be available to new employees and current employees who are already in the DB plan can remain in it or switch to the company’s defined contribution plan.
As of July 1, 2012, the DC plan will include an automatic RBC contribution, higher matching contributions and higher annual RBC contribution limits, said Hirji.
The changes are being made to ensure more predictable pension costs in the future, according to an RBC spokesperson. “There is no cost savings for us in the near term,” she told the Globe.
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