THE ISSUE
WHAT HAS HAPPENED TO US AT CPR BECAUSE OF THE AMENDMENTS?
1) CPR has dramatically reduced the growth of our lump sum up to the age of 55, after which time we can no longer take the lump sum. After age 55 you have no choice but to take the monthly Pension. The growth we have seen in our lump sum since January 1, 2005 is our contributions plus minimal interest of 2% - 3%. We have seen lump sum values in the $500,000.00 to $1,000,000.00 range literally reduced by hundreds of thousands of dollars for employees who are in the 50 years of age area since the amendments came into effect. For the newer employees, they will NEVER see this kind of growth and will probably after age 50 and 30 years of service see in the neighborhood of $200,000.00 - $300,000.00 in total. These numbers in no way can be considered if you wanted to terminate your employment for whatever reason. This dramatic change has completely eliminated the option and CPR knows they have removed something that they hope will retain the employee longer in their workplace.
2) Consent has been given back to the company. As it states in the Amendments to Canadian Pacific Railway Company Pension Plan effective January 1, 2005 "In order to receive an unreduced pension prior to age 65, you must have company consent". We all know that there is a provision if consent is denied that would result in the employee receiving a minimum of $70,000.00 for each year denied. Why would the TCRC give back consent? We have ALL paid EXTRA into this Pension Plan since approximately 1986 in order to have the ability to retire at age 55. We have heard that the company will never deny consent but that statement alone is not at all reassuring and if manpower shortages come up in the future, will they work you longer? There appears to be no "fine print" on this subject and the contract reads very simply. We all know how CPR deals with things that are vague in their language (our interpretation of this is…….. and is never to the employees benefit). You just have to look at TCS after all of these years (implemented in 1995) and this company is still making changes to one of the worst things to ever happen to train crews. Denying consent may not occur in the near future but at some point it will (after the Grandfathered employees are gone?), otherwise, why was it important for the company to get the consent rule back. The door has been opened for the company to retain their employees longer.
3) No consent from CPR and the pension penalties will be applied. Say you have your 85 points and apply for your pension and CPR denies you consent. You will receive a minimum of $70,000.00 up front and you will continue to work. This following scenario was given to the CPR Pension Department last year: I have my 85 points and 55 years of age with a fully paid pension, I do not want the $70,000.00, I just want to retire. The answer we got from CPR (in writing) was as follows: "We cannot stop you from retiring but your pension will be penalized 6% per year until age 65". This penalty is actually 6% X 10 years equaling 60% of your pension. What this means is your for example $5000.00 per month pension is reduced by 60% to $2000.00…….after taxes you will see approximately $1200.00 clear. Will you still take your pension…….not likely? What CPR has done is force you to work until THEY say you can retire. Again…. It is not a question of if they WILL deny consent….it is a question of WHEN.
3) Grandfathering………the simple definition is: "What was at this date remains the same". CPR has a different definition that entailed changes for EVERY EMPLOYEE. How were we the members able to read this in the "Tentative Agreement" (that we were to go over and vote on with a clear and complete understanding) and supposedly understand fully? None of us in any way could fore see what was going to happen and in no way gave permission to the TCRC to agree with CPR and do what they did to all of us. The TCRC has limited authority……..not "carte blanche".
4) Who should consider taking their lump sum? Some people likely should not have opted for this and did not do enough research or "due diligence". If you or your spouse has health issues that "shorten your life expectancy" you should investigate the option fully. Why? If you die before your spouse she/he will get anywhere from 60% - 100% depending on your option taken. If she/he were to die after you, it will leave little if any for your children. You will generally exhaust your contributions to the pension plan in about 5 years. If you decided on the lump sum and both you and your spouse were to die, your children/estate would receive the money that is left. What is better for your children…….something or nothing…….this should be an easy answer.
As with the changes to the plan today, if you were to die at say age 54 (prior to age 55) and your pension was not fully paid, your spouse would get 60% of a "not fully paid pension". 60% of say $4000.00 would be $2400.00 and clear after taxes about $1400.00. This is it, no more, forever or until she/he were to die and then nothing left for your children. Can your family live on this? In the same scenario, say the lump sum accumulated was or would have been $1,000,000.00; even 5% interest would give them more money to live on. What happened at CNR (as bad as our situation) was implemented by the company without the Unions there being involved (the Unions at CNR are currently fighting the changes with Union money). At CN, the commuted value option is no longer a viable option since CN issued a memo on June 8, 2006 BUT the lump sum CONTINUES to grow for Survivor Benefits and is still available for individuals who are terminally ill or who have a shortened life expectancy due to health reasons. Simply put……..survivor benefits at CNR WERE NOT affected with the changes but at CPR the amendments have dramatically lowered the large growth of the lump sum that we had enjoyed INCLUDING the Survivor Benefit lump sum growth.
5) Some of our Union Executive has been telling their local membership that if our brothers continue to take the lump sum option it will adversely affect the pension plan in the future. This statement was not backed up with ANY fact. If seems to have been said ONLY to create a FEAR about our pension plan and its future.
The deficiency in our pension plan of $846,000,000.00 in 2005 was not of OUR (unionized employees) fault and it is certainly not up to unionized employees to make up the deficiency…….it is the companies responsibility (our Canadian Government says so). CPR applied for an extension to pay up the pension plan from 5 years to 10 years but later decided that they did not require the extension. As in a letter from the CPR Pension Department earlier this year explaining that "CPR did not require the 5 year extension because our investments did very well in 2006 and we were able to eliminate our deficiency" (this letter is in our possession). The investments and interest no doubt helped but it was the Amendment changes that were primarily responsible in eliminating the deficiency. The Pension Department just failed to mention the whole story. What CPR has gotten through these Amendments (thanks to the TCRC) is something that EVERY company wants……..absolutely no liability in the Pension Plan……EVER!
Just recently on RAILTOWN (CPR employee info site) a question was asked about lump sum vs. monthly pension. It states that 16% of non-unionized employees have taken the lump sum option. It also states; "The lump sum option does not negatively impact the plan’s solvency funded position as a result of non-unionized employees taking lump sum payments on retirement". This statement pretty much takes care of comments made by several Local Chairmen on the subject. Note that the statement from Railtown speaks of non-unionized employees. These are questions that we are going to get answered. Why are we, the unionized employees looked upon as second class employees? We (TCRC) pay more into the CPR pension plan than ANY other group or department at CPR and yet others (non-unionized) continue to have an option that was taken away from us. For those that did not know, management people TODAY are taking lump sum payments out in the $1,000,000.00 to $1,300,000.00 range.
Another thing everyone should know is that when non-unionized employees (management) want to retire, their pension forms ask that they "check off" what they want to do. A check mark for a monthly pension or a check mark for a lump sum payment. For management, the lump sum option is a "Retirement" option and not a "Termination" option like it is for unionized members. Why should this difference exist between management (non-unionized) and unionized employees? Included when management takes the lump sum option is a Health Spending Account. Why don't we get that if we choose the commuted value option; will we not get sick in our retirements?
In closing we would again remind you that each and every one of us, junior through senior employees was adversely affected by the "Amendments to The Pension Plan" implemented January 1, 2005 in some way, shape or form. If any of our TCRC brothers have answers to our questions and concerns or have received answers from the TCRC Executive, we would like them forwarded to us so we would know. A letter was sent by our lawyers on April 16th, 2008 to the TCRC and CPR explaining our position and whether they would like to comment….…to this day we have not gotten a response. Another letter was sent to a General Chairman in February 2008 by one of our brothers explaining his serious health condition and unpredictable future and to explain to him and his family WHY the TCRC would do what they did and what the costs to him and his family would be. Again, there was no response from the Union. The ignoring of a dues paying brother of over 30 years is inexcusable and shows considerable disrespect to him and his family. Especially to one who faces an uncertain future and certainly has other more important issues in life to deal with. This letter from our brother will be posted on the website. (The brother in question has just recently terminated and quite possibly lost in the neighborhood of $250,000.00 because of the Amendment changes)
We wish we were wrong on all of this but unfortunately we are not. It appears that the only way we can get answers and to hopefully regain what we had is to take legal action.
We have accumulated many documents that verify what we have stated above and will post on the website (www.deception5411.com) only if it does not hurt or give away our position in the Class Action Lawsuit.
If you still do not understand what has happened, you owe it to yourself and your family to get a clear understanding. Please contact us and we will do our best with the information we have to further clarify the position we were put into by CPR and the TCRC.
Thank You
David Boyko
Jeff Smith
Bill Worthington
Alan Leite
|
