Pension conversion fallout lands in court
Workers sue company after finding move to defined-contribution plan may leave them worse off
It looked like a good deal. Back in 1997, employees at what was then Riverside Forest Products Ltd., in Kelowna, B.C., were given a one-time offer: stay in their current pension plan, or switch to a new “defined-contribution” plan.
“Whether we’re choosing a new coat or a new car, we make our decision based on our unique personal needs,” a company bulletin told more than 200 employees. “When it comes to retirement planning, we all have different approaches to our retirement years. That’s why choice plays a key role in planning for the future.”
The company acknowledged that the new plan would no longer guarantee how much money employees would receive in their retirement. Each employee received a personalized package, complete with charts and graphs, that estimated how much they would receive under the new plan. Many agreed to switch.
In 2004, the company was taken over by Vernon, B.C.-based Tolko Industries Ltd. One employee who made the move to the new plan, worried about his future, decided to take another look at his pension with a financial adviser. The numbers, it is alleged in a lawsuit now before the Supreme Court of B.C., no longer appeared to add up. read full story
INFORMATION UPDATE #29 September 6, 2010
MOTION TO SUPPORT 8300 PENSIONERS AT STELCO TO BE PRESENTED ON SEPTEMBER 15 AT HAMILTON CITYCOUNCIL
It was recently announced that Ward 4 Councillor Sam Merulla will be presenting a motion at City Hall on September 15, 2010 at 7 p.m. in the Council Chambers. The motion states “Whereas, the families of the Pensioners are affected by US Steel’s decision on indexing; and whereas, this impact is felt city wide; and whereas, Hamilton City Council wishes to call on US Steel to live up to their commitments to the people of the city of Hamilton; Therefore be it resolved: The Hamilton City Council express its concern to US Steel and request a reversal of their decision to not pay the indexing for the 8300 pensioner families.”
One of US Steel’s demands from Local 1005 during this round of bargaining is they want the union to agree that the pensions for 8300 pensioners no longer be indexed. With indexing, a pensioner receiving $1000 a month in 1991 when indexing began is now receiving $1366 a month. To eliminate indexing would result in financial difficulty for pensioners, especially with daily surprises, such as the HST, the increases in hydro rates, etc. Rather than deal with this issue seriously, US Steel unilaterally stopped indexing pensions as of August 1, 2010, when the contract expired.
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INFORMATION UPDATE #28 August 30, 2010
MOTION TO SUPPORT 8300 PENSIONERS AT STELCO TO BE PRESENTED ON SEPTEMBER 15 AT HAMILTON CITY COUNCIL
It was recently announced that Ward 4 Councillor Sam Merulla will be presenting a motion at City Hall on September 15, 2010 at 7 p.m. in the Council Chambers. The motion states “Whereas, the families of the Pensioners are affected by US Steel’s decision on indexing; and whereas, this impact is felt city wide; and whereas, Hamilton City Council wishes to call on US Steel to live up to their commitments to the people of the city of Hamilton; Therefore be it resolved: The Hamilton City Council express its concern to US Steel and request a reversal of their decision to not pay the indexing for the 8300 pensioner families.”
One of US Steel’s demands from Local 1005 during this round of bargaining is they want the union to agree that the pensions for 8300 pensioners no longer be indexed. With indexing, a pensioner receiving $1000 a month in 1991 when indexing began is now receiving $1366 a month. To eliminate indexing would result in financial difficulty for pensioners, especially with daily surprises, such as the HST, the increases in hydro rates, etc. Rather than deal with this issue seriously, US Steel unilaterally stopped indexing pensions as of August 1, 2010, when the contract expired. read more
INFORMATION UPDATE 2010 #27 - August 23, 2010 - To Our Members and Retirees - U.S. Steel’s Latest Provocation
Company Unilaterally Cancels Pension Indexing
In what is becoming tiresome and repetitive anti-Canadian behavior, U.S. Steel has broken its commitment to retired Stelco steelworkers by canceling their August 1 indexing amount. Indexing of pensions is a well established Canadian norm encompassing not only company pension plans but the government’s Canadian Pension Plan as well. Without indexing of pension income, retirees soon see their monthly pensions wither away. Canceling indexing and otherwise reducing pensions not only affects individual retirees but also the communities where they live, depriving them of the capacity to circulate goods and services.
U.S. Steel assumed social responsibility for the Stelco pension plans of 8,300 Stelco retirees at Hamilton Works and hundreds more at Lake Erie Works when it seized the Canadian company in 2007. Legally, morally and in public letters of commitment, U.S. Steel swore to uphold its social obligations to the pension plans and this group of elderly Canadians. But once the takeover was complete, the monopoly changed its tune in practice. read more
YOU BE THE JUDGE
Responding to an article by Steve Arnold printed on August 11th, 2010
I don’t want to be the one that told you so. I wrote an article back in February that was printed in the Hamilton Spectator on February 13th, 2010, that U.S. Steel can not be trusted. Not only did I warn our Members both active and retired, but I also warned all levels of government, Federal, Provincial and Municipal government! I also warned the community, not only in Hamilton but also the surrounding area.
Local 1005 as you all know are in the bargaining process; we have gone past the deadline. We are fighting to protect all of our “Hard Fought Gains” We have taken this position since the old Stelco went into CCAA. Since then Local 1005 has always lived up to their end of the bargain. We go in and make the steel and we are entitled to our wages, pensions and benefits which were all agreed to in bargaining.
What changed since U.S. Steel took over? Their words mean nothing.
An article was printed in the Spectator on October 5th, 2007; a response letter telling the people that their pensions and benefits are safe with U.S. Steel. I suppose she is less than truthful, because August 1st, 2010 has come and U.S. Steel is not paying the Pensioner’s indexing. They have money to pay down their loans and even to give shareholders dividend payments.
U.S. Steel should do the right thing. Pay the workers what they promised. They should sign the deal which they have agreed they could live with when they bought Stelco. They should prove me wrong - that their word means something instead of a lot of hot air.
Yours truly, Jake Lombardo, Grievance Chairperson Local 1005.
Work (905) 547-1417 ext 243/Home (905) 545-2845/
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
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INFORMATION UPDATE #26 August 9, 2010
FOR YOUR INFORMATION: AS OF AUGUST 1, 2010 U.S. STEEL IS NOT INDEXING THE PENSIONS FOR THE 8300 PENSIONERS
Local 1005 workers received their first indexing increase on pensions beginning in 1991, after the 1990 strike. The indexing formula is based how well the pension plan does and high the Consumer Price Index goes and has ranged from 0% to 3.1%. Last August 1st the increase was only .08% because of the financial collapse and its effect on the pension plan investments.
We did not receive an indexing increase on August 1, 2010 because according to the company, the indexing letter only covers the life of the contract which expired on July 31, 2010. They are covering the indexing that we already received (which is also regulated by the Pension Benefits Act), but U.S. Steel says they are not obligated to add additional increases unless it is negotiated in a new contract.
Local 1005 USW and U.S. Steel Canada have been in negotiations since May 20, 2010. The contract expired on July 31, 2010. Since neither party has asked for a conciliator, under Section 86 of the Ontario Labour Relations Act(OLRA) which states :”86.(1) Working conditions may not be altered.-Where notice has been given under section 16 or section 59 and no collective agreement is in operation, no employer shall, except with the consent of the trade union, alter the rates of wages or any other term or condition of employment or any right, privilege or duty, of the employer, the trade union or the employees…(a) until the Minister has appointed a conciliation officer or a mediator under this Act, and, (i) seven days have elapsed after the Minister has released to the parties the report of a conciliation board or mediator, or (ii) 14 days have elapsed after the Minister has released to the parties a notice that he or she does not consider it advisable to appoint a conciliation board, as the case may be; or (b) until the right of the trade union to represent the employees has been terminated, whichever comes first.
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INFORMATION UPDATE 2010 #25 August 3, 2010
LOCAL 1005 USW WORKERS WORK PAST EXPIRY DATE: TERMS OF THE PRESENT CONTRACT CONTINUE:
CONCESSIONS ARE NOT SOLUTIONS!
Under the terms of the Ontario Labour Relations Act, if a company and a union have a collective agreement that is expiring (The U.S. Steel-Local 1005 USW contract expired July 31, 2010), if neither party files for a conciliation officer, the terms of the present contract continue indefinitely. When one of the parties to the contract files for a conciliator, and after a “No Board” report is issued, the company will be able to lock out the workers 17 days after the issuing of a No Board report. Or the union could be in a strike position if it has taken a strike vote. At this time, neither party has asked for a conciliation officer.
At the time of printing, U.S. Steel is still demanding concessions from its workforce at Hamilton Works. These concessions include the demand that new hires be placed in a defined contribution savings plan, thus ending over 50 years of workers having a pension plan; the demand to eliminate the pension indexing formula for the over 8000 pensioners; the demand to stop covering the health benefits for the over 180 members of the plan who have exhausted the $70,000 limit on benefits. As well they are proposing that the maximum vacation time a worker will have is five weeks from the present 7 weeks, and they want to change the cost of living formula such that a worker would receive about 20% of what the previous formula paid.
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Information Update Collective Bargaining
Please report to work next week as normal
Currently we are in Bargaining with US Steel. Under the terms of the Ontario Labour Relations Act the terms of our current collective agreement are in effect until such a time that either party applies for a conciliator.
If a Conciliator is requested we will update the membership at that time.
We work under the terms of the Collective Agreement until;
· Either party asks the Ministry of Labour for a Conciliation officer.
Conciliation Officers are Ministry staff, who help the parties come to an agreement. (To date this process has not taken place and the Union would be contacted as soon as U.S. Steel requests these services)
· If conciliation is not successful, the officer advises the Minister of Labour, who issues a “ NO BOARD “ report and sends it to each party.
· 17 days after the date of the Minister’s “NO BOARD” report the Company could legally lock us out.
We will advise the membership if the Conciliation process begins and until then we are working under the terms of the current Collective Agreement.
Should you have any questions do not hesitate to call the Union Hall.
Weekly Information Meetings every Thursday at 3:30 pm
350 Kenilworth Ave North, Hamilton.
(905) 547-1417- website: www.uswa1005.ca
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Letter to Members and Retirees of Local 1005 USW What’s Going On?
U.S. Steel has asked its Canadian workers to give up a defined benefit pension plan for new hires and give up indexing on the current plan. It says times have changed and it requires relief in the form of concessions on benefits and pensions that have been part of Hamilton workers’ culture for over fifty years. What’s this all about?
When U.S. Steel bought Stelco on October 31, 2007, it was full aware of its obligations toward the over 8000 pensioners and the pension fund. It signed a contract with the federal government guaranteeing employment and production levels and declared in press releases that its takeover would be no problem for Canadians and even a “net benefit”, swearing up and down that Hamilton workers and community businesses were safe with them. Fully aware that the business climate is sometimes fair and sometimes foul it did due diligence into the viability of the Stelco plants and made public and contractual commitments to the people of Canada that its seizure would not harm us and our communities.
Since U.S. Steel purchased Stelco, nothing has changed as far as its present obligations to the pension plan, its contract with the government on production and employment levels or the business cycle that went down and is now trending upwards. But today, U.S. Steel is singing a different tune. Why is this? Why should Hamilton Steelworkers give up their defined benefit pension plan and indexing just because it suits U.S. Steel to sing another tune?
We are reproducing below a letter published by a representative of U.S. Steel in the Hamilton Spectator on October 5, 2007 which shows that it is not us who are not in tune with the times. It is U.S. Steel. Our commitment to our pensioners and new hires is not a PR job and is not for sale.
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Ottawa can sue U.S. Steel for broken promises: Court
Steelmaker failed to maintain jobs and production as part of Stelco purchase
A federal appeals court has rejected effort by U. S. Steel to stop a hearing that could lead to the forced sale of the former Stelco.
In a decision released this morning the Federal Court of Appeal ruled against the company. The Pittsburgh-based firm, which purchased Stelco in 2007, sought the ruling as a way to derail a federal lawsuit seeking millions of dollars in penalties against the company for breaking promises to maintain jobs and production in exchange for government approval of the sale.
U. S. Steel argued that if it had to proceed with a hearing on the merits or the government’s case it would be forced to defend itself without the procedural protections afforded to a criminal defendant, and that this would give rise to “irreparable harm.” This, it argued, makes the Investment Canada Act unconstitutional.
The appeals court found the company affidavit on which its argument was based “opinion and argument” rather than evidence and didn’t support the claim of harm. read more
INFORMATION UPDATE 2010 #24 July 21, 2010
YOU BE THE JUDGE:
DON’T BE FOOLED INTO BELIEVING A DC PLAN IS BETTER FOR YOU!
Recently members of Local 1005 and I attended a National Policy Conference in Toronto held the week of April 27th, 2010. Delegates at this conference were Steelworkers from all over Canada.
The reason I am writing this article is to explain why this Negotiation Committee is fighting to keep all of our “hard fought gains” and the importance of a defined pension benefit plan.
At this conference the Steelworkers brought in a pension expert to talk about the difference between defined benefit pension plans versus the defined contribution savings plans and that the unions have to fight to keep the defined pension plans. At the end of the discussions there was a clear conclusion: a defined benefit pension plan gives you retirement security. You know what you are going to get when you retire.
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INFORMATION UPDATE 2010 #23 July 19, 2010
U.S. STEEL’S DEMANDS FOR CONCESSIONS: CONCESSIONS ARE NOT SOLUTIONS!
U.S. Steel is demanding concessions from its workforce at Hamilton Works. These concessions include the demand that new hires be placed in a defined contribution savings plan, thus ending over 50 years of workers having a pension plan; the demand to eliminate the pension indexing formula for the over 8000 pensioners; the demand to stop covering the health benefits for the over 180 members of the plan who have exhausted the $70,000 limit on benefits. As well they are proposing that the maximum vacation time a worker will have is five weeks from the present 7 weeks, and they want to change the cost of living formula such that a worker would receive about 20% of what the previous formula paid.
WHAT ARE THESE CONCESSIONS SUPPOSED TO ACCOMPLISH?
According to the arguments by the big corporations, the media, various intellectuals and gurus, when workers give up concessions this will make the corporation more competitive, both in Canada and internationally. When the argument is followed to its conclusion, the reasoning goes like this: if the workers work for lower wages, give up their pension plan, give up their indexing, etc., the “costs” to the company are less and therefore the company can then sell their steel for less money, and compete more effectively. The workers are told that it is there duty as loyal company employees (and sometimes as patriotic Canadians) to do whatever is necessary to make their company competitive. They are told that this is what will protect their jobs.
Anyone who does not agree to this is labeled a troublemaker and someone who does not care about the company and wants to crater the company, and is even unpatriotic.
click here to read more
Information Update Collective Bargaining Process
This is for information purposes to try to help explain what the Legal process is for Collective Bargaining in Ontario.
The Union gave notice to bargain on Apr 26th, 2010. We first met the company on May 20th, 2010 and began meeting regularly on June 7. We have been in bargaining since that time.
If no agreement is reached,
We work under the terms of the collective agreement until,
· Either party asks the Ministry of Labour for a conciliation officer.
Conciliation officers are Ministry staff, who helps the parties come to an agreement. (To date this process has not taken place and the Union would be contacted as soon as US Steel requests these services)
· If conciliation is not successful, the officer advises the Minister of Labour, who issues a “NO BOARD” report and sends it to each party.
· 17 days after the date of the Minister’s “ NO BOARD “ report and after the expiry of the collective agreement, at that point, we could be legally locked out. Likewise, the current contract is not in effect, and the company could alter working conditions.
“NOTE THE LEGAL TIMEFRAMES ABOVE COULD NOT BE REACHED BY AUG 1st”.
We will advise the membership as soon as the process begins and until then we are working under the terms of the current Collective Agreement.
Click here for more information
INFORMATION UPDATE #21 July 12, 2010
15 YEARS OF TRYING TO GET STELCO AND US STEEL TO LIVE UP TO THEIR PENSION OBLIGATIONS!
It is reported that the workers at Vale Inco accepted a Defined Contribution (DC) Savings plan for new hires. A DC savings plan for new hires was also accepted by the workers at Lake Erie Works in April. Some people are suggesting that now the workers at Local 1005 have “no choice” but to agree to a DC plan for new hires. It should be pointed out that we were also told during the CCAA process that Local 1005 had “no choice” but to agree to the CCAA scam. By opposing the CCAA process from the beginning we were successful in not losing anything. In a way, what is necessary is to say No! to the attempts by these large corporations to wipe out the workers’ pension plans.
Local 1005 USW has been dealing with the pension issue since 1997 when the union first became aware that Stelco had not been making their solvency payments (payments which were designed to protect workers’ pensions in case a company went bankrupt). Stelco applied to stop making these payments six weeks after the contract in 1996 was ratified. From that time the company has been trying by one way or another to deal with the “pension problem.” The union has been opposing these attempts by the old Stelco first by fighting for two and one half years at the Ontario Labour Relations Board. During the CCAA process started by the old Stelco on January 29, 2004, the company and the CCAA court were trying to get Local 1005 to participate in changing the pension arrangement in one way or another. Local 1005 kept saying we had a contract and expected everyone to live up to the terms of the agreement. The point here is that Local 1005 has been fighting for over 15 years to protect the pensions and indexing of pensions for its members and pensioners. read more
INFORMATION UPDATE #20 July 5, 2010
COMPANIES ARE DEMANDING THAT THE UNIONS ATTACK THE MOST VULNERABLE!
The Local 1005 USW contract with U.S. Steel Canada expires on July 31, 2010. The formal negotiating process began on May 20, 2010, with the Local 1005 negotiating committee meeting with the company negotiating committee almost every day since June 7. Several issues have come to the fore in these negotiations which are issues all across Canada and in North America.
First of all, a trend began to develop in the early 2000’s where over 240,000 steelworker pensioners in the U.S. had their pensions reduced by anywhere from 10-70%. Various steel companies either filed for bankruptcy or used Chapter 11 and used the Pension Benefit Guarantee Corporation (PBGC) to reduce the pensions. What this created was a taste by these corporations (one of which is now the largest steel company in the world, ArcelorMittal) for the huge profits that can result if companies no longer have to look after pensioners.
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INFORMATION UPDATE #19 June 28, 2010
Oppose the Police Tactics at the G8-G20 Protests
Local 1005 congratulates its members and pensioners who participated in the protests against the agendas of the G8 and G20 in Toronto last week, especially in the Saturday Day of Action. So too we congratulate the members of the Hamilton unions and, most importantly, the youth from our city who together with thousands of others courageously defied the campaign of fear which sought to persuade them not to take a stand against the G8/G20 agendas and in defence of their right to protest and express their views.
As many of you know, Local 1005 USW stood firmly with the youth. As a matter of principle we chose to stand with the sons and daughters of the people to defend them against the wild and vicious police attacks and obstruction. read full story
to view pictures of the protest look under Image Gallery
click here to view a interview with CNN
INFORMATION UPDATE #18 JUNE 21, 2010
FEDERAL COURT RULES AGAINST U.S.STEEL
On June 14, 2010 the decision was finally handed down by Justice Dolores M. Hansen from the hearings held on January 12, 13 and 14th , 2010 in Federal Court. The decision upheld the right of the Attorney General of Canada to sue for penalties against U.S. Steel for failing to meet its commitments under the Investment Canada Act (ICA). Barring any further delaying tactics by U.S. Steel, the hearings should proceed.
U.S. Steel seized control of Stelco on October 31, 2007. The sale to U.S. Steel had to be approved by the federal government under the ICA. At that time, U.S. Steel made 31 commitments to the government of Canada, the details of which were secret. It was released later that two of the commitments were that U.S. Steel promised to maintain employment at the two Canadian facilities at 3,105 employees for three years after the sale, and they promised to produce over 4.3 million tons for three years also. read more
U.S. Steel loses in Canadian court
Decision opens way for Ottawa's suit against steel maker
A ruling by the Federal Court Monday has cleared the way for Ottawa's lawsuit against United States Steel over its acquisition of Hamilton, Ont.-based Stelco in 2007.
The court ruled the government has the power to impose penalties against U. S. Steel and rejected the steel giant's argument that the Charter of Rights and Freedoms negates some parts of the Investment Canada Act.
The company had promised to preserve jobs and make new investment at the Stelco operations in Hamilton, Ont., and Nanticoke, Ont., but closed the plants during the recession.
Ottawa had sought to impose fines on U.S. Steel for breaking its promises, but the firm argued that the recession was beyond its control and prevented it from living up to its commitments.
The company had argued in Federal Court that parts of the Investment Canada Act violate the Charter of Rights and Freedoms and the rights it provides for corporations.
read the Federal Court Decision here
INFORMATION UPDATE # 17 JUNE 14, 2010
WHAT ARE THE STRUCTURAL PROBLEMS STEELWORKERS HAVE TO DEAL WITH?
A structural problem is a very serious issue. A structural problem can result in the whole building collapsing. What are the structural problems in the steel industry?
One of the main ones is that the industry is very capital intensive. It requires huge investments in building, furnaces, machines, and infrastructure. For instance, U.S. Steel announced in their recent financial results that their ownership of long-term debt is over $3.65 billion dollars while their ownership of common shares equity is around $7.5 billion although this money total goes up or down depending on how the stock is traded on stock exchanges. Before the crisis hit in the fall of 2008, US Steel’s shares were traded at over $190, but now trade at about $47. This trading of shares is one way that monopoly capital tries to deal with this structural problem of a declining rate of return on invested capital. From the numbers US Steel releases, it appears that US Steel’s stock equity and debt ownership is over $11 billion, while the capital tied up in operating expenses is over $15 billion. Both the owners of the debt and the owners of equity are demanding their pound of flesh. And the owners of this debt and equity look at the claims of the workers and retirees as a cost of production that must be reduced or even eliminated. read full story
INFORMATION UPDATE # 16 JUNE 7, 2010
THE DEMAND FOR CONCESSIONS WILL NEVER END UNLESS THE WORKERS ARE PREPARED TO TAKE A STAND!
We are preparing an article entitled “The Defined Benefit Pension Plan- Our Local’s Experience” on the page 2 of this leaflet. This article was published in May 2010 issue of the Local 6166 USW newsletter, Steel Gauntlet, produced out of Thompson, Manitoba. It is an article by jack Alexander, President of USW Local I-830, a local that represents workers in a cardboard box manufacturing plant in Winnipeg. read full story
INFORMATION # 15 May 31, 2010
NEGOTIATIONS WITH US STEEL CANADA
For Your Information: Local 1005 USW met with the negotiating team from US Steel Canada on May 20, 2010. It was agreed that the parties would work to reach an agreement as soon as possible before the July 31,2010 contract expiry date. The parties outlined their concerns in the upcoming negotiations, with some preliminary discussion on possible solutions to the problems. The next meeting is scheduled for June 7, 2010. read more
INFORMATION UPDATE #14 May 17, 2010
THE ATTACK ON PENSIONS IS PART OF NATION WRECKING
Local 1005 was formed after a bitter struggle for union recognition in 1946. The strike between Local 1005 USW and Stelco was part of the historic battle that was going on across North America where workers fought for their right to unionize and to declare that they have rights by the fact that they are the producers of the wealth in Canada. It was in 1956 that the union won the right to have a defined benefit (DB) pension plan to try to ensure that the Stelco retirees were able to retire in dignity after 30-40 years working in a steel plant. There were strikes in 1958, 1969, 1981 and 1990 when one of the demands workers fought for was that the DB pension plan be increased. The 1005 pension plan was indexed as part of the settlement after the 1990 strike. read full story
To apply for openings at US Steel Hamilton click on the links below
http://ussteel.oats.hrsmart.com/cgi-bin/a/highlightjob.cgi?jobid=2469
http://ussteel.oats.hrsmart.com/cgi-bin/a/highlightjob.cgi?jobid=2468
http://ussteel.oats.hrsmart.com/cgi-bin/a/highlightjob.cgi?jobid=2350
INFORMATION UPDATE #13 May 10, 2010
A special thank you to all who participated in the May 1, 2010 Rally and Demonstration to oppose the nation-wrecking going on across Canada and who participated in the May 2, 2010 Conference on Nation-Building. read full story
May Day Rally 2010
Conference On Nation Building May 2, 2010
Read Rolf Gerstenberger Speech Here
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