Cosy benefits at Canada Post

June 29, 2011

The Chronicle Herald printed a letter I sent in response to a previous letter submitted by the Canada Post union local boss. The union letter was called  Profits before people at Canada Post.

My letter was titled Cosy benefits at Canada Post: Time for taxpayers to strike.

The letter from a Canada Post employee expressed some concerns with the dialogue. It follows here.

I want to comment on your article in the Halifax Chronicle Herald on June 28 2011.
I have been working at Canada Post for over 30 years. I have over 1500 accumulated sick hours. I do receive 7 weeks vacation. For anyone else starting out at Canada post they get 3 weeks vacation up until the work 7 years and then they get 4 and every 7 years you get one more week vacation. I have no option to ” use severance from sick time to buy back extra pension at 5 cent on the dollar”. Can you tell me where you found that because I sure would like to do it. My sick leave will never be paid out to me or anyone else at the end of my career at Canada Post. If you so concerned about the pension you should be aware that in 10 years 22,000 employees will be retiring from Canada Post. If you think Canada post is going to replace them your living in a dream world. Canada Post just spent 2 billion dollars on new equipment that will sequence the first class letters. Now with letter mail volumes dropping like a stone[if you believe the spin doctors at Canada Post] I’m not sure how you can justify spending that kind of money. With all these errors in your article I think you should make corrections or perhaps do better research or both.

My response:

Vacation time:
The vacation time allowance at Canada Post seems very fair. I spend my time working with small businesses on benefit and compensation issues. Most employees do not receive 7 weeks each year, on top of statutory holidays and family leave days.

Pensions Service Buy Back

This is an option that allows public sector employees to retire early without having to put in the full amount of qualifying years into the pension plan. It is know as the pension buy back or the service buy back.
Here is the link for more information about it at the federal government pension site.

Sick Time Payouts
In April of this year Canada Post issued a memo stating that they would offer to purchase your sick time payout. Normally most public sector employees can bank this until the end of their career and then collect.

Quote:  – Each of you will get to keep your accumulated sick leave credits, and those with more than 150 sick leave credits in the bank will be eligible for a cash payout.

Pension Ponzi
Yes the pension plan is a serious concern. The future contributions into the plan will be what make up the future benefits and cover the existing shortfall. It will fall upon future employees and taxpayers to cover the shortfall of future benefits. There will be problems if employment drops and even fewer employees are around to make contributions.
Part of the problem has been that pension contributions have fallen way short of what has been required to fully fund the plan. Funding for these types of plans have proven to be in the range of 32% of salary. Most employees in the plan will receive far more from the pension than they ever received in annual compensation. Does this seem sustainable?

Thanks for your thoughtful letter and I hope that I have been able to address the issues you have raised.



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