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The Society of Energy Professionals, which represents engineers and finance and other white-collar types at Hydro One, has ratified a new labour agreement that freezes compensation costs and effectively buys out some future pension contributions from the employer, Energy Minister Bob Chiarelli announced Tuesday morning.
It is, he said, a “net-zero” deal that offsets 0.5-per-cent pay hikes for the next three years with “hiring flexibility,” he said, which is the kind of agreement the province has been insisting on with its many unions. The pay hikes and how they’ll be covered are probably less important than the pension arrangement, though. Here’s Chiarelli:
Following on the findings of the 2014 Leech Report on Electricity Sector Pension Sustainability, this agreement will also bring transformational change to Hydro One’s employee pensions. Workers have agreed to significantly increased pension contributions – bringing them closer to equal cost sharing – which will have a favourable impact on electricity rates for years to come.
In fairness to current employees, Hydro One agreed to a transitional lump sum and Hydro One share payments to assist existing employees with these increased pension contributions. Significantly, new employees will not be eligible, but will contribute to their pensions at the increased level included in the agreement.
That Leech report warned that pensions in Ontario’s electricity industry aren’t sustainable and said the employers — which means, by extension, electricity consumers — are paying a share of the contributions that’s out of whack with pensions in much of the rest of the economy. Like, 80-20, with early-retirement incentives and inflation-indexing. Without judging whether those benefits are right or wrong (it depends where pension benefits fit into a worker’s total compensation package), they’re much better than those most workers get.
And since really the only place the money for the employer’s contributions can come from is consumers who generally don’t have pensions that are as good as that, there’s both an immediate impact on hydro rates and a bigger-picture question of fairness.
Based on Chiarelli’s wording (“bringing them closer to equal cost sharing”) the new agreement doesn’t get to the 50-50 cost-sharing target Jim Leech called for, but it’s a move in that direction. Current workers will get a payoff and shares of the soon-to-be-privatized Hydro One to buy out the employer contributions, though. Practically speaking, that’s the only way to get a public-sector union to vote for what amounts to a clawback, though in a sense it means current workers are ganging up on future ones, getting a payoff now in exchange for giving up an advantage for everyone.
Leech pointed out that part of the problem with an 80-20 split of pension contributions between employer and employees is that the employer’s 80-per-cent on the hook for anything unexpected, like a sustained period of crummy investment returns. Pension liabilities being a big problem for many large companies in a slow-growth economy like the one we seem to have now, making a deal with Hydro One workers on pension reform will also make a large stake in Hydro One easier to sell to private investors.
dreevely@ottawacitizen.com
twitter.com/davidreevely
查看原文...
It is, he said, a “net-zero” deal that offsets 0.5-per-cent pay hikes for the next three years with “hiring flexibility,” he said, which is the kind of agreement the province has been insisting on with its many unions. The pay hikes and how they’ll be covered are probably less important than the pension arrangement, though. Here’s Chiarelli:
Following on the findings of the 2014 Leech Report on Electricity Sector Pension Sustainability, this agreement will also bring transformational change to Hydro One’s employee pensions. Workers have agreed to significantly increased pension contributions – bringing them closer to equal cost sharing – which will have a favourable impact on electricity rates for years to come.
In fairness to current employees, Hydro One agreed to a transitional lump sum and Hydro One share payments to assist existing employees with these increased pension contributions. Significantly, new employees will not be eligible, but will contribute to their pensions at the increased level included in the agreement.
That Leech report warned that pensions in Ontario’s electricity industry aren’t sustainable and said the employers — which means, by extension, electricity consumers — are paying a share of the contributions that’s out of whack with pensions in much of the rest of the economy. Like, 80-20, with early-retirement incentives and inflation-indexing. Without judging whether those benefits are right or wrong (it depends where pension benefits fit into a worker’s total compensation package), they’re much better than those most workers get.
And since really the only place the money for the employer’s contributions can come from is consumers who generally don’t have pensions that are as good as that, there’s both an immediate impact on hydro rates and a bigger-picture question of fairness.
Based on Chiarelli’s wording (“bringing them closer to equal cost sharing”) the new agreement doesn’t get to the 50-50 cost-sharing target Jim Leech called for, but it’s a move in that direction. Current workers will get a payoff and shares of the soon-to-be-privatized Hydro One to buy out the employer contributions, though. Practically speaking, that’s the only way to get a public-sector union to vote for what amounts to a clawback, though in a sense it means current workers are ganging up on future ones, getting a payoff now in exchange for giving up an advantage for everyone.
Leech pointed out that part of the problem with an 80-20 split of pension contributions between employer and employees is that the employer’s 80-per-cent on the hook for anything unexpected, like a sustained period of crummy investment returns. Pension liabilities being a big problem for many large companies in a slow-growth economy like the one we seem to have now, making a deal with Hydro One workers on pension reform will also make a large stake in Hydro One easier to sell to private investors.
dreevely@ottawacitizen.com
twitter.com/davidreevely
查看原文...
