The Canadian Union of Public Employees Local 561 is calling on the Coquitlam, B.C., school district to reverse its decision to cut post-retirement health benefits for all permanent management employees who retire after Dec. 31, 2017.

Earlier this year, School District #43 employees received a notice announcing the year-end closure of its post-retirement health and dental benefits program for future retirees due in part to significant and increasing costs. According to the district’s notice, it makes annual cash payments of about $600,000 to the program. In addition, it has set aside more than $3 million annually to fund the program’s future obligations in accordance with the applicable accounting rules.

However, the school district says it now needs that amount to make additional solvency funding payments to its non-teaching pension plan, which had a shortfall of $48.7 million at its latest actuarial valuation as of Dec. 31, 2016.

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“On a solvency basis, the valuation shows that assets in the [pension plan] would not have been sufficient to cover the cost of immediately settling benefits if [it] had been wound up on the valuation date,” stated the notice. “Because of this solvency deficiency, when lump-sum benefits are paid out of the [pension plan] on an ongoing basis (e.g., on termination of a member), SD43 contributes additional funds to enable such amounts to be paid in full.”

While the Coquitlam school district enjoys a temporary exemption from making solvency deficiency amortization payments to the pension plan until at least the end of October 2017, the notice said the additional funding from the retiree health benefits program would address the deficit.

The school district’s retiree benefits program helps manage inflationary increases for health and dental costs by keeping the monthly premiums from increasing too quickly. According to the district’s website, the program has helped to stabilize premium costs for extended health and dental expenses for the past several years. 

But in its notice to employees, the district said it doesn’t guarantee the retiree health and dental benefits program. “It is reviewed annually and the board may make changes to availability, eligibility, benefit levels, premium rates and cost-sharing of premiums, even after you retire.”

A spokesperson from the school board told Benefits Canada there’s no contractual obligation to provide retiree benefits, which has been stated for more than 20 years. “And the union has recognized that it’s in the school district’s purview to change, alter, cancel these benefits at any point in time,” he added.

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CUPE Local 561 represents roughly 1,600 education support workers in the district. The union’s campaign, which includes newspaper and radio advertisements, aims to educate the public and ask for their support. “These workers were promised health benefits when they retire,” said CUPE Local 561 president Dave Ginter. “They deserve more than broken promises from their employer. These workers have supported students in Coquitlam schools and worked hard to serve their community.”

The school district’s spokesperson noted it provided CUPE with an alternative program that would have provided some benefits, but it was rejected.

“This is a decision about keeping jobs or letting jobs go in order to find the money to make solvency payments.”

Comments from the Coquitlam school district were added on Nov. 7 at 10 a.m.

Copyright © 2017 Transcontinental Media G.P. Originally published on benefitscanada.com

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