After several months of negotiations between Nova Scotia’s East Coast Credit Union and Unifor, 44 employees have voted in favour of strike action over the proposed closure of their defined benefit plan.
The credit union is proposing to close the pension to new entrants and then wind it up over 10 years, according to president and chief executive officer Ken Shea.
“What we believe that will do is allow those who are currently in the plan to make it to their retirement date or get a lot closer to it with minimal impact on them,” he says. “And the union’s approach has been a status quo with no changes, and we just don’t believe that’s a sustainable pension for us in the long run.”
If the planned change is implemented, any new employees, as well as the 44 workers still in the defined benefit plan, would be moved over to the company’s existing defined contribution plan, which includes a nine per cent employer match. About 150 credit union staff are in the defined contribution plan, including Shea.
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“We have a very generous defined contribution pension for all the other employees. It’s nine [per cent] plus nine [per cent], which is, I think, very generous, and provides people with a very real expectation of a decent retirement income,” he says.
While negotiations are still underway, according to Shea, the 44 employees represented by Unifor voted 98 per cent in favour of strike action earlier this month. “East Coast Credit Union claims to be ‘firmly rooted in the communities’ and takes ‘a human approach,’ to decisions, but to take away our pension plan and replace it with a less secure plan is just not fair to current workers and nor is it fair to the next generation of workers,” said Jeanne Doiron, Unifor Local 2107’s unit chair, in a news release.
Shea says the closure of the defined benefit pension would remove the inherent risk of such a plan to the organization. “We’re not a large organization in the global scheme of financial services. We just believe that this type of risk is hard for us to have on our balance sheet. It is something that a lot of employers need to look at and we feel that we’re taking a fairly reasonable approach.”