July 12, 2022
IT’S ALMOST LIKE MC HAMMER was singing about union pension plans…
“The nice thing about a union pension is that you can’t touch it,” says Roy Bizzutto, business manager for the Operative Plasterers’ and Cement Masons’ International Association (OPCMIA) Local 919. “That money’s there until you decide to retire.”
While other types of investments might yield short-term gains, and it may be frustrating not to have access to pension money before retirement, it’s the long game that matters, said Bizzutto. “The goal across all the unions,” he said, “is to have the member and the family on health and welfare and have dental and medical benefits paid for and to be able to retire with something.”
Union pension funds help take the load of financial planning off the shoulders of individual workers.
“You know, once you join a union and you’re working under a union agreement, you get your annual statement, you look at what you can retire with at the age of 65. It’s not like an RRSP where you’re guessing all the time, you know, what are rates going to do for your RRSPs? What’s better, mutual funds or term deposits?”
By contrast, union pension plans have trustees who will worry about those things for members, he said.
“There is a collective sharing and pooling of risks amongst all of the members,” said Tara Campbell, administrator for the LiUNA Local 1611. The funds are generally more stable over the long term. And members can benefit from the high level of expertise involved in managing those funds, she said.
“Our members have a wonderful asset of belonging to one pension instead of 10 little ones,” she said, which allows them to work for more than one employer, and still retain their pensions. This shared load helps to reduce financial strain and gives members more flexibility both during and after their working lives, and members still have access to other kinds of financial planning in addition to their pensions.
Union representatives frequently have to explain the value of a pension to younger members whose own retirements may be 25 or 30 years down the road. Bizzutto said there’s a lot of pressure on younger people who are only looking for higher incomes so they can get into the housing market.
“Housing is more important than retirement at the age of 25,” he said. “It’s really, really tough for a 25-year-old to really sink his teeth into a pension, especially when his main goal is to get into the market.”
While non-union companies may offer to pay more per hour for wages, the trade-off is they do not provide extended health, dental and pension benefits, he said. “You’re betting on today, and giving up something for tomorrow,” he said.
“When we have meetings with people hired in their 30s and 40s who are not used to having a pension, it’s a real eye opener,” said Bizzutto, and there are a lot of questions about why they didn’t start earlier. “I know a lot of guys in their 70s who are still working in construction just because they haven’t put enough money away and they have no choice, they have to work,” he said.
While the security of a pension may be difficult to appreciate earlier in working life, it can make a world of difference to construction workers over the long haul. Retired construction worker Grant Washington said that his union pension has “been the difference between night and day.” “I’m enjoying my retirement immensely, and I can’t imagine having a job without it,” he said.
“For people just coming into the industry, it feels like it will go on forever and they will have to keep grinding away, but your actual working years go by quickly and then you actually are retiring,” he said.
Washington, who was a derrick operator with OPCMIA Local 919, said there’s a peace of mind knowing the money will be there for his family if something happens to him. “I’ve been retired for going on 17 years and nothing’s gone down in price,” he said. “It’s the consistency of that cheque coming in just as if you had a regular job. I couldn’t survive without it.”
Brenton Breary, also a retired member of OPCMIA Local 919, said the pension gave him something to look forward to. He especially wanted to send a message to young people coming into the industry. “You know, its not a bed of roses but as long as you have protection, someone to stand by you like a union, that’s best,” he said. “To me, it’s a security for the future,” he said.
By Megan Terepocki