Pensions

Ontario aerospace workers facing 25% pension cut

Workers about to lose their jobs at Northstar Aerospace’s operations in Milton, Ont., are now facing the prospect of a 25 per cent cut to their pensions.

After returning from the holiday break last year, workers “were given the notice that they were going to actually close the plant,” says Cammie Peirce, a national representative in Unifor’s pensions and benefits department.

After announcing a plan to close the plant as of this September, the Illinois-based company tabled a proposal to reduce pension entitlements by 25 per cent, according to Peirce. “Under the ideology that it’s going to carry on forever, it’s funded satisfactorily. But on a windup situation, it is underfunded,” she says.

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“Right now, based on January 2017, it is sitting at about 76 per cent funded on a windup basis. So our retirees . . . have not got the opportunity to do anything to change their fixed income are facing a 25 per cent cut to their pension,” she says, emphasizing that the company isn’t facing bankruptcy.

The company had previously assured the 200 employees in Milton that the operations were healthy, so the sudden closure came as a shock, according to Unifor.

“They’re not in financial hardship, they’re making lots of money, and our position is if you’re shutting the doors, you need to protect the pensions, especially the pensions of our retirees who are not in any position to recoup,” says Peirce.

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“It’s heartbreaking when you have someone come up to you and say, ‘You know, I thought I was fine but now I’m really afraid of what’s going to happen if I pass away before my wife does,’ because she then gets 60 per cent of his 75 per cent,” she adds.

The union remains optimistic about the potential for a solution as it continues to negotiate with the company, however. “I think we’re at the point where we’re going to be able to get some kind of a satisfactory agreement,” says Peirce.

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