Bombardier Inc.’s 2,100 production and office workers operating in Toronto will see improvements to their pension and dental benefits, as well as the introduction of a retirement incentive scheme, as part of the latest collective agreement between Unifor Local 112 and the company.

The pension increases, which amount to an additional $6 each month per year of credited service for production employees and $7 for skilled trades workers, take effect on July 1. “So we’re getting all of our increases as of July 1, this year, as opposed to increments over three years, which entices people, knowing that they’re getting . . . the extra money right upfront, to take packages and retirement early,” says Scott McILmoyle, president of Unifor Local 112.

Read: Unions continue effort to convert multi-employer pension to target-benefit plan

Under the new retirement incentive scheme, 70 packages of $35,000 each are available. Members must be eligible for retirement to get one, says McILmoyle. Bombardier compiles a list of those who qualify for retirement, checks it with the union and then allows 30 days for them to take the company up on the offer. Occasionally, employees don’t leave right away because their expertise in training their replacements can take a few months to share, he says.

“Unions have typically gone after costing the company money for outsourcing of a job. And we have that, but our outsourcing plan was a little different,” says McILmoyle.

“So, we were able to negotiate retirement packages as a lump sum, so people are ready to go. . . . In the corporate world, people get golden handshakes. And this is a way for our members to get recognition for years of service. They get to put something into their bank account or [registered retirement savings plan], whatever they want. It helps people make that transition of saying, ‘OK, I can go now.'”

Read: How Canadian Tire connects retirement to profits

The retirement of senior employees is good for the workforce as a whole because it pushes everyone up on the seniority ladder, says McILmoyle.

“It ends up getting your senior members to move on into the next stage of life, into retirement. . . . As younger workers move up, the seniority move on. There are more open spots, the company ends up hiring people. There is a growing period in terms of their wages, so you’ve got a cost savings for the company with younger people coming in.”

Union members will also see improvements to dental coverage.

Dental coverage is one of the only benefits not extended to retired members, says McILmoyle. However, he points out that retired members have been expressing frustration with modest cost-of-living adjustments to the pension plan. As such, in the new collective agreement, all members will receive a one-time payment of $800.

Read: Wages, flexible working top issues for unionized workplaces for 2018: report

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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