On January 25, 2011, the government put forward a final offer, which was unanimously rejected by Corrections members.
The government agreed to return to the table after the vote, but one of the most important outstanding issues — a pension increase — has delayed negotiations. Up to this point, the government was unable to provide the necessary information we needed to calculate the costs of the increase.
Finally, late in April, the employer did provide that information and we’ve been able to begin working on a response to their final offer that will adequately address the proposals put forward by Corrections members.
In that time, we’ve also learned that the original proposal put forward for a 2.33% increase for the remainder of each member’s life is not allowed under the Income Tax Act. A 2.33% increase could only be enacted until age 65 under those rules.
We know pension increases remain an important issue for the membership. So the committee is asking members to provide feedback on which of the two proposed formulas you prefer.
YOUR CURRENT PENSION FORMULA
1.6% x Pensionable Service x Average Salary, up to YMPE* + 2% on earnings over the YMPE* = Your Pension
For a Correctional Officer I with twenty-five years of service, the current formula translates into a pension of just over $1,950 a month.
OPTION #1** - 2% FLAT RATE FORMULA
2% flat rate x Pensionable Service x Average Salary = Your Pension
For a Correctional Officer I with twenty-five years of service, this formula translates into a $2,350 monthly pension. This formula increases the benefit for a flat rate over your lifetime, so it doesn’t matter if you retire early or later in your career.
OPTION #2 ** - 2.33% Bridge Formula
2.33% x Pensionable Service x Average Salary before 65 +(1.6% after age 65 x Pensionable Service x Average Salary before 65 + 2% on earnings over the YMPE*) = Your Pension
For a Correctional Officer I with twenty-five years of service this translates into a pension of $2,700 per month before age 65 and about $1,950 per month after 65. This option puts the increase up front, which might allow some members to retire earlier, but then returns to the current formula after age 65.
Keep in mind that if either of these formulas are implemented, they would be applied on a go-forward basis. The new rates would only be applied to your years of service after the effective date. If you’ve been delaying your retirement because you’re anticipating a retroactive increase, neither option will result in a significant increase to your pension.
ATTEND A MEETING, FILL OUT THE SURVEY
Obviously, unless you’re a pension expert, these formulas can be a little complex to figure out. That’s why we’re holding a series of meetings across the province with our MGEU Pension Officer, Liz Farler, to help explain the plans in detail and answer your questions about each option.
| Mon., June 13 - Winnipeg Union Centre, Rm 2C 1:00 p.m. and 7:30 p.m. |
Thurs., June 16 - Beausejour Sun Gro Centre, Sunova Rm 7:00 p.m. |
Mon., June 20 - Dauphin MGEU Office 7:00 p.m. |
| Tues., June 21 - The Pas MGEU Office 1:30 p.m. and 7:00 p.m. |
Mon., June 27 - Portage MGEU Office 1:00 p.m. and 7:00 p.m. |
Tues., June 28 - Brandon MGEU Office 1:00 p.m. – 7:00 p.m. |
We want to hear which option you prefer so that we can take the will of the majority forward to the employer.
Once you’ve heard about each of the options at the meeting, we’re asking members to fill out a short survey. Surveys must be completed before Thursday, June 30.
We want to know how much of a priority the pension issue is to members. For instance, would you be willing to forgo a wage increase in favour of a pension increase? If the employer is unwilling to increase their pension contributions, would you support an employee-paid increase?
The answers to such questions will have an impact on all of our retirements, so it’s vital that you make every effort to attend a meeting in your Area.
- MGEU Corrections Bargaining Committee
*Canada Pension Yearly Maximum Pensionable Earnings
**This option would not be retroactive. Existing pensionable earnings would be calculated using the old formula