Saskatoon transit workers have withdrawn their job action, which included work to rule and a ban to overtime, after a majority ratified a collective agreement with the City of Saskatoon on Tuesday.
Members of the Amalgamated Transit Union Local 615 voted 55.83 per cent in favour of the agreement and city council will finalize the deal with a vote on Thursday. By signing the new agreement, transit workers have agreed to join eight other unions and associations in accepting changes to the defined benefit pension plan.
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“All along, we were not recommending the offer [to our members],” says Jim Yakubowski, president of Local 615. But, “narrowly the democracy of the people that voted accepted the offer . . . so we’re moving forward.”
According to the city’s website, there are two major changes to the defined benefit pension plan under the new agreement. Firstly, if the pension goes into a “shortfall,” the city and all of the unions under the agreement will sit down and decide what to do. Secondly, taxpayers and employees will only contribute up to an additional 0.7 per cent to the plan under that scenario. If the shortfall isn’t covered by those extra funds, the city and members would discuss other options to ensure the plan is sustainable.
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According to the city’s website, Aon Hewitt was hired to review the pension plan and found a shortfall of $63 million. The changes, which the eight other unions and associations agreed to, were made two years ago to address the deficiency and ensure the pension plan remains sustainable.
Yakubowski says the cap on contribution rates and the introduction of a dispute resolution mechanism make the defined benefit pension plan similar to a target-benefit pension plan. “Basically, from our perspective, the changes shift the liability and risk onto the backs of our members as opposed to the traditional structure where the city is ultimately responsible for any shortfalls,” he says. “I believe that fighting for a defined benefit pension plan structure is our future and very important . . .”
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However, he does understand why a slim majority of members decided to vote for the changes, citing several factors such as the lack of a collective agreement for the past four years, which meant employees were still being paid 2012 wage rates. As part of the agreement, the city will retroactively pay full-time workers a lump sum in a range between $10 and $12,000. Transit workers will also get a 10 per cent wage increase.
The new deal will be effective until March 2017, at which time there will be a new round of collective bargaining, according to Yakubowski.