Many members will recall that in the 2018 round of collective bargaining YUFA negotiated an agreement to introduce CPI-based indexation for the “minimum guarantee portion” of the York University Pension Plan. Unfortunately, after bargaining ended the employer introduced a very restrictive and implausible interpretation of “minimum guarantee portion,” treating it as the equivalent of the “minimum guarantee supplement.” As we reported previously, if their interpretation were to prevail it would mean that most members would not receive meaningful inflation protection for their pensionable future years of service.
As the prospect of full litigation of the grievance gave us leverage, YUFA entered negotiations to resolve the grievance by focusing on increasing the employer’s contributions to our retiree benefits plan. This would provide financial improvements to retirees commensurate with pension indexation. In the end, and after several rounds of mediation, the employer agreed to more than double its annual contribution to our retiree benefits (which is partially funded by retiree premiums and the York University Retired Faculty and Librarians Benefit Trust Fund), thereby bringing a tangible financial benefit to all retirees as an alternative to pension indexation (which likely would have only applied mostly to future – not past – years of pensionable service). The financial value of this settlement is $1.5M per year and can be renegotiated upwards in future rounds of collective bargaining.
There are several positive aspects to this solution, not the least of which is that CPI-based indexation - no matter how full or partial - would have only applied to retirees receiving a minimum guarantee pension, and not those receiving a money purchase pension. Moreover, these improved retiree benefits will immediately apply to all current and future retirees. Doubling employer funding for YUFA’s retiree benefits should allow us to close some of the gap between our Plan and those of our counterparts at other universities. In order to bring this to fruition, the parties will work during the first months of 2022 to translate the improved funding into meaningful improvements to key retiree health benefits areas such as dental coverage and so on.
Of course, as many of our members know, YUFA still faces a challenge in increasing support for our members’ financial needs in retirement. Even with these improvements our retiree benefits program may still lag many similar plans at other universities. And, with respect to pensions, it remains the case that most Ontario universities still dedicate a significantly higher percentage of their overall salaries and benefits budget than York does to this area. Much of the difference is attributable to our lack of inflation protection for pension benefits in retirement. At York members only receive pension adjustments in retirement when the Plan's investments earn above a given threshold. As a result, retirees run a high risk that the buying power of their pension will decline, even as their CPP climbs with inflation.
As part of the settlement YUFA has agreed to not pursue further improvements to retiree benefits and pensions in the current round of collective bargaining where we are already facing legislated limits to improvements under Bill 124, which places a 1% cap on benefits and compensation for new collective agreements.
In the next months, YUFA will push for increases to the retiree benefits plan with the additional money from the settlement. In future rounds of bargaining YUFA will need to continue to push for improvements to retiree benefits and pension and will work hard to convince the employer that financial security in retirement brings benefits to the university as a whole.
Members who wish to learn more about our pension and retiree benefits plan are invited to click on the links below: