In 2021 YUFA settled a grievance regarding the pension indexation program negotiated in the 2018 round of collective bargaining. On the one hand, the settlement was disappointing for YUFA in that it did not result in a full indexing of member’s minimum guarantee pensions. However, in place of pension indexing, the parties were able to agree to more than double the employer’s contribution to the annual base funding for retiree health and dental benefits.

YUFA was convinced that this settlement would begin to address some of the significant weaknesses in our current retiree benefits program which not only requires retiring members to pay significant premiums and deductibles for benefits coverage, but also to accept large reductions in key benefits areas such as dental and vision care upon retirement.

Under the settlement the employer’s annual contribution for the program would increase from $1.3M to $2.8M. The terms of the settlement committed the parties to negotiate changes to the plan and gave the arbitrator the authority to decide on how and whether the new funding might translate into new benefits arrangements if the parties failed to agree.

Calculations used by both parties showed that the new funding would make available resources for significant improvements in YUFA retiree benefits program over the next few years. Based on those numbers YUFA proposed the following improvements, which even the employer’s analysis showed were completely affordable during the life of the current Collective Agreement (leaving available a surplus) within the new funding level:

While the employer did not deny that these improvements would be affordable (under the new funding) for the next 3-4 years they nevertheless argued that a new benefits package for retirees should be based on the assumption that the new retiree benefits funding level would be frozen for at least ten years into the future. They argued, any improvements to benefits introduced should be limited to pay for anticipated future cost increases over that (hypothetical) time frame of frozen funding. YUFA argued that this was not only an arbitrary constraint not specified in the terms of settlement governing the negotiations, it also runs contrary to the history of the program where funding for retiree benefits is regularly increased (in collective bargaining) to maintain and improve the benefits program and is not set aside to pay for anticipated increases a decade later. Moreover, this approach would have the absurd and unprecedented result of leaving very large surplus reserves ($2-4M) sitting unused in the retiree benefits program.

At that point we assumed that the matter would have to be sent to the arbitrator for resolution. However, the parties were able to schedule a second meeting at which it was expected YUFA would receive the employer’s counter-proposal.

At the second and final meeting the employer refused to engage with the Union’s proposal to improve benefits and indicated instead the outlines of a counter-proposal that would provide no benefits improvements other than a new annual health spending account (HSA) to the retiree benefits program. Remarkably, the employer declined to indicate the annual amount of the HSA, so providing no way for YUFA to know how to weigh the value of the proposal. Even more remarkably, the employer insisted that it would have the unilateral right to revoke the new HSA program after 2024.

YUFA is disappointed that a promising opportunity to apply new funding to improve our retiree benefits program is being obstructed by the employer and must now proceed to litigation. Unfortunately, these negotiations form part of a recent pattern in which the employer has demonstrated a hard-line approach to issues of financial security for YUFA retirees, by not only refusing to provide inflation-based pension indexing but also entertaining a new proposal to impose 5% reductions to the money purchase pensions of all York employees.

We remain hopeful of a better result as the matter is referred back to the arbitrator.