Sunday, August 28, 2011

Air Canada Attendants Reject Deal Over the Pensions of 'Future Employees'

This news item causes me to do two things:

First, let me warn you about some possible Air Canada schedule disruptions later next month after the flight attendants who just turned down a deal, take their strike vote. Even if the Government steps in (assuming the attendants strike) as it threatened to do recently, any possible strike will last several days.  That's not too bad unless those happen to be one of the days you're flying.  So, act accordingly and let the ticket buyer beware!

Secondly, let me talk for a bit about pensions.  But before I do I must declare what some may consider to be an ethical conflict.  Let me admit to you that I do in fact have a "defined benefits" pension plan from an employer with which I had 25 years of service.  It's a pension plan that guarantees me a certain amount of pension each month regardless of how well or how poorly the company's pension investments do.   There, I've said it, and now I feel free to comment.

This type of plan is different from a "defined contributions" plan where the company puts in a set amount into an investment for the employee.  When he/she gets his/her pension, how much they get depends on how well or how poorly the investment has done.  The amount is no longer the company's problem, it's the employee's concern as he/she owns the investment.

While I have such a plan, many of my friends do not, and my children do not.  In fact, those types of plans are going out of style like Kodak Brownie cameras and Ford Edsel cars.  I never asked for that type of plan -- it was given to me in a different economic time and generation, when my company was doing well, at least better than it is now.

Unions that fought hard and got these kind of plans got them when workers of all types were badly needed and they could demand anything in order to keep from striking.  Unemployment was very low and skilled workers were hard to find.  In case no one has noticed, things have changed.

Years ago, living in a more pristine environment, eating our own home- or local farm- grown food, fewer people got cancer.  Now living in the big industrial cities with all the smog and all the additives in our food, as well as a host of other reasons, more seem to be dying from cancer.  We all have to live with it.  I suggest some people learn to do the same thing with the pensions they are fortunate to get.  Many people today don't get a pension plan at all except what the government may offer in the way of social security plans.

Defined benefits pension plans are very expensive, especially given the economy.   Continuing them for some companies may mean, "we have seen the end and it'll be here soon" because they can't afford them.  Unions are being short-sighted in pushing for these plans.  Especially pushing for these plans for employees (or union members) they have never even met.   Air Canada, like other employers, is not killing the 'living' defined benefits plans, it just wants to prevent any more being born.

If Unions want to do something proactive here, let them negotiate some other type of bonus if a company's fortune grows to a certain point, but the day of the "defined benefits pension plan" is over -- if not this collective agreement, certainly the next one.  It is not sustainable in a volatile economic world as we are likely to be facing long into the future.

Air Canada flight attendants turn down labour deal - Business - CBC News

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