Negotiations Update



Member Communique: 

Bargaining Update

At the union’s request, the parties returned to the bargaining table on April 5, 2019.  The intent of the meeting was to continue discussions about the union’s pension proposal.  While discussions were cordial, unfortunately we did not make any progress.

The Essential Services Tribunal will continue in May and June with closing arguments scheduled for June 14, 2019.  We can expect a decision from the Tribunal at the end of June or early July.  No job action can be taken until a decision is reached.

No further bargaining dates are scheduled.






CUPE did not propose a “true” Jointly-Sponsored Pension Plan since surpluses are spent on member benefits and do not benefit the University


Our proposal was a jointly-sponsored plan with a very conservative approach to surplus use, which we specifically chose to better meet the University’s stated concerns about risk. Plan surpluses can be used for different things – they can be spent on benefit improvements, used to reduce or eliminate required contributions to the plan (a contribution holiday), or they can remain in the plan to act as a buffer against future downturns. The University is incorrect that we proposed surpluses would only be spent on benefits. Our proposal actually said that all surpluses would not be spent and would remain in the plan (as a buffer against future downturns) until the plan was 120% funded. This is a very conservative approach. Having this buffer would help in keeping the plan out of deficit in a future downturn. Most other jointly-sponsored plans in the country would start “spending” surplus on benefit improvements at much lower levels. Having a high buffer like this, however, would help prevent contributions from rising in response to a future market downturn (i.e. directly addressing the main concern the University raised about pension costs). We could have left this buffer out and said that all plan surplus was for benefit improvements, but we did not. We set this high bar that directly benefits the University by helping to keep contributions stable. The University’s critique on this point reveals the reality that they don’t like our proposed restrictions on their ability to take even more contribution holidays in the future. We also indicated at the table that we were prepared to talk more about the surplus provision if the University was not satisfied with it, but the University never engaged on this point, rejected our position and is now raising these points in public instead of at the bargaining table.





“The defined benefit pension that you have earned up to the point of any changes to the plan CANNOT be changed and is payable monthly for your lifetime”

“Current pensioners will not be affected by any future changes”


These statements are currently true, but there are no guarantees that they will always be true. The Saskatchewan Pension Benefits Act is the source of the legal obligation that says that past DB pension promises cannot be later reduced. But this legislation can be changed. And similar legislation has been changing in very troubling ways in other provinces in recent years.

In 2012, the government of New Brunswick changed its Pension Benefits Act to give employers the option to convert their existing Defined Benefit plans (where benefits cannot be reduced) into Target Benefit plans (where benefits can be legally reduced). These conversions are permitted not only on a go-forward basis, but also on a retroactive basis for DB benefits that have already been promised. Essentially, the rewrite of the NB pension law allowed employers to legally walk away from the pension promises they had made to both active workers and retirees. Most of the public sector plans in the province have since been converted under this law.

The governments of Prince Edward Island and Quebec partially followed suit for certain public sector plans. The Trudeau federal Liberal government has tabled similar legislation for federally-regulated pensions. Manitoba and Nova Scotia are in the midst of consultations about whether to import these laws to their jurisdictions.

The Saskatchewan government could follow suit and pass similar changes to our province’s Pension Benefits Act. If they did so, the University would have the option of converting your already-earned promised pension into a promise-less “target” benefit. If that option is on the table for the University, we would need two things to stop them: 1) control over our pension plan, 2) a local membership that continues to be fully committed to preserving the DB plan (which would not be the case if either of the University proposals were accepted).

The University likely emphasizes the points above because they want members who are close to retirement to feel that their stakes in this fight are relatively low, since most of their pension is already “banked” and fully protected. If we accepted the University’s proposal to move into a DC plan, how would this member’s pension be protected if our provincial laws were changed? Why would a future membership fight to preserve the DB plan of retirees, when most active members never even participated in the plan?

Pensions in Canada are under attack, with even past promises being put on the table. We will need the next generation to fight to protect our pensions in retirement. As always, we are stronger together.




The Essential Services tribunal will continue on:  

  • May 2, 3 (Employer evidence)
  • May 22, 24 (Employer evidence)
  • June 4-7 (Union evidence)
  • June 14 (Argument)

No job action (including withdrawal of services or lockout) can commence until we receive a ruling from the Tribunal.

We will be back at the bargaining table on April 5th and will provide an update after that meeting.





 “The DB plan type that has been on the decline over the past number of years across the country”


While fewer private sector employers are offering DB pension plans, this plan type remains standard in the public sector.

91% of public sector workers who have a pension plan have a DB plan.

DB plans remain standard in the University sector, particularly for non-academic staff unions that CUPE represents.

Essential Services Tribunal Hearing Update


The Essential Services Tribunal hearing commenced on March 26-28.  During those three days, testimony was provided by five of the ten employer witnesses.  We are in the process of setting additional dates to continue the hearing.  Once the University’s witnesses are finished, CUPE will submit its evidence.  We will continue to update you throughout the process.





The University is offering a “competitive pension plan”                                                                                                                   


The University has offered two different pension plans (Defined Contribution or Target Benefit) that share the same basic legal structure. In both proposed plans: 1) the University bears no risks and 2) plan members bear all of the risks. This is a complete change from your current DB plan, which provides secure, promised pension benefits that members can count on through their entire retirement. The University says they do not want any pension risk. They would prefer to see plan members with no real pension security, where your life in retirement will be tied to the whims of the stock and bond markets. These insecure types of pensions are not in any way comparable to the current DB plan.

Upending the structure of the plan is apparently not enough, however. In both scenarios, the University also proposes lower contribution rates, which would save the University millions of dollars per year. For the average CUPE 1975 member, the employer would save about $2000 per year! (in addition to dumping all of the pension risk onto plan members).

Roughly speaking, the “Target” benefit option actually aims to deliver about 25% less than your current DB plan does! And since the benefits are not promised like your DB benefits are, you may very well receive less than this. It’s all up to the markets and if you happen to work and retire at the “right” time.

The DC option is even worse. We can’t say what it will deliver compared to the DB plan, since the benefits here are wholly dependent on market returns. This uncertainty is exactly why we don’t like DC plans. Given the contribution rates and the structure of the plan, the proposed DC plan is probably worth some 40-50% less than the DB plan you currently have.

Complete risk shifting, massive cost savings and huge reductions in benefit value do not result in a “competitive” pension plan to your current DB plan!

Current Defined Benefit (DB) Defined Contribution (DC) Target Benefit (TB)
Ongoing Cost to University (as % of Payroll) 11.37% 6.82% 7.5%
Annual University Savings (as % of Payroll) N/A 4.55% 3.87%
Annual University Savings (for an average CUPE member salary $50,000) N/A $2275 $1935




“This pension plan is in a deficit and running an annual shortfall”


After nine years of being in deficit, the interim 2017 valuation revealed that the plan is now back in surplus (103% funded, $12 million surplus) on the actuary’s best estimate basis. If a 5% funding buffer (or “margin”) is added to artificially inflate the plan’s liabilities, the plan has a very slight deficit (98% funded). In either case, the funding level has improved materially over the past decade.

Virtually all pension plans fell into deficit after the 2009 financial crisis – the worst market crisis since the Great Depression. Our plan fell to a low funding level of 86% in 2011. The important point is that the plan has been steadily improving its funding level since this low point. The existence of a deficit in any given year does not mean the plan is broken or in crisis. The pension system is designed to bring plans back into balance over time.

The plan is also not “running an annual shortfall.” This suggests that the required contributions to the plan are not being made and that the plan has a structural funding problem. This is not the case. The “annual shortfall” the University refers to here seems to be a reference to the fact that the University contributes more than members do for the ongoing cost of the plan. The legal plan document says that members pay 8.5% of earnings into the plan, and that the employer must pay the remaining required contributions to the plan (and must at least match what members put into the plan). Currently, the ongoing cost of the plan is 19.87%. Members pay 8.5%, leaving the University to pay the remaining 11.37%. The University calls the difference between the member and employer rates (11.37% – 8.5% = 2.87%) an “annual shortfall.” There is no legal or actuarial principle that says that employers and members must equally share the ongoing cost of the plan. Our plan text does not say that members must pay the same as the employer. It is quite common for member contribution obligations to be fixed, as ours is, leaving the employer responsible to fund the remainder, which is often a larger amount, again, as it is in our plan currently.

So this is not an “annual shortfall.” All of the required annual contributions to the plan are being made. The language used has likely been chosen (and left unexplained) by the University to advance their bargaining agenda: to convince you that your pension plan has a structural problem that does not really exist. This being said, we understand that the Employer does not like the fact that they currently contribute more to the plan than members do. Our pension proposal would reduce member benefits slightly on a go-forward basis and increase member contributions slightly to eliminate this differential. Ongoing costs would then be shared 50/50 in our proposal (eliminating what they call the “annual shortfall”). The University rejected this proposal.