There are 2 primary targets for the BCARTW
I. A Fair Share of the Pension Surplus for Retirees
II. A Guaranteed Retiree on the Pension Board
1. A Fair Share of the Pension Surplus for Retirees
Ad Hoc increases to the limit under the Income Tax Act, depending on the Funding Status of the Plan, eliminate additional limit imposed by Trustees
Explanation:
As per the TWPP Funding Policy, ad hoc increases for retirees are the tertiary objective of the Plan, after annual updates for active members, and a sufficient ‘cushion’ in the event of an adverse financial downturn. These increases may be approved by the Trustees – at their sole discretion – depending upon the funded position of the Plan. To be clear: the BCARTW and the retirees support the first and second objectives of the Plan. We want all Plan members to be able to retire with the benefits that we have enjoyed over the course of our retirement.
Increases for retirees are limited by the Income Tax Act to the increase in CPI (Consumer Price Index) year over year. For example – if the increase in CPI from August 1, 2020, to August 1, 2021, is 4%, that is all the Trustees are allowed to approve as an increase.
What we did not know is that the Trustees have established a limit in addition to the limit in the Income Tax Act. This Trustee limit is 25 percent of the increase in CPI. (If the increase in CPI is 4%, they will approve up to 1%. If the increase in CPI is too low to warrant an increase (eg - .01), the 25 percent is cumulative and can be approved later.) This limit was passed by the Trustees in 2007 and has apparently been implemented since then. They now consider it a ‘de facto policy’ because of past practice. This ‘de facto policy’ is not included in the Funding Policy.
The BCARTW will be lobbying the Trustees to eliminate the arbitrary limit imposed by the Trustees in 2007 and approve increases subject to the Funding Status of the Plan and to the amount allowed by the Income Tax Act.
If we are not successful, then, in the interests of transparency, the BCARTW will be pursuing the Trustees to have this policy included in the Funding Policy. And we will be inquiring if there are any other rules, policies, de facto or otherwise, that have not been included in the Funding Policy.
2. A Guaranteed Retiree on the Board of Trustees
This may only be possible through the Federal Government passing legislation that guarantees retirees positions on Pension Boards. We will continue to pursue this.