days until our Collective Agreement expires, we are preparing, we are united and we will make change.

LOU#3 – Pension




Pension arrangement and improvements were negotiated in the November 1, 2001 to August 31, 2005 Collective Agreement and are included in LOU 30.


L3.01                GENERAL:  It is agreed that notwithstanding Section 18 of the provisions of the Air Canada Pension Plan, no termination, modification, or amendment shall be made to the provisions of the Plan which would increase the contributions required to be made by any employee covered by the Collective Agreement or would reduce or adversely affect any of the benefits, rights, privileges or options under the Air Canada Pension Plan of any such employee, or any former employee or pensioner who, at the time of his/her termination of employment or retirement from the Company, was in a classification covered by the Collective Agreement or a predecessor thereto, or of any dependent, beneficiary or estate of such an employee, former employee or pensioner, during the life of the Collective Agreement without the consent of the Union.


L3.02                Before the effective date of any law or statute or change in law or statute which would affect the design of the pension plan or the benefit levels or rights or privileges or options of any such employees, the Company and representatives of the Union shall meet to agree upon any change of contributions or benefits which would result therefrom.


L3.03                It is understood that the member’s share of the assets of the fund will remain in the fund for investment purposes and that costs normally borne by the fund will be charged to the member’s share of the assets on a proportionate basis.


L3.04                Effective January 1, 1983, in addition to the foregoing, separate ongoing accounting will be kept of member and Company contributions to the fund and disbursements made from the fund with respect to the Plan members covered by this Agreement.


L3.05                For the purposes of this Understanding, “member” and “member of the Union” shall include:


L3.05.01  a)  Employees who are in classifications covered by this Collective Agreement between the Company and the Union;


b)    Former vested employees and pensioners who, at the time of their termination of employment or retirement from the Company were in the classifications covered by the above Collective Agreement or any predecessor thereto;


c)    Dependants, beneficiaries, and estates of the employees, former employees and pensioners referred to in (a) and (b) above.


L3.06          A special Joint Sub-Committee with equal representation from both the Company and the Union (maximum six (6)) will be established and will meet to deal with matters related to the Pension Plan.

L3.07                  CANADIAN PENSION REFORM: it is agreed that for those employees covered by this Collective Agreement, the effective date of the Canadian Pension Reform as described in the Pension Benefit Standard Act, 1985 and Regulations will be January 1, 1987 rather than September 1, 1987 for all active members who are in classifications covered by this Collective agreement as of September 1, 1987. The term “active members’ includes employees under any leave of absence, but excludes individuals who have terminated, died or retired prior to September 1, 1987.


L3.08                  ARBITRAL REINSTATEMENT: The following provisions apply solely to an employee who is terminated and/or discharged and subsequently reinstated as the result of an arbitration process.


L3.08.01         A terminated/discharged employee is permitted to apply for as refund of his non-vested personal pension plan contributions plus accrued interest to the date of his termination/discharge but such an employee will only be entitled to plan benefits as described under Section 8 of the Pension Plan.


L3.08.02         Section 2., Clause 13 of the Pension Plan administration Procedures states in part:


                  An eligible or participating employee whose contributions have been refunded following his discharge and who is reinstated in service may, subject to the approval of the Committee and within three months of such reinstatement, repay to the Fund the amount so refunded.


L3.08.03         A terminated/discharged employee who elects a refund and who arranges for a direct transfer of his pension plan monies to a Registered Retirement Savings Plan must comply with section 2.2, Clause 13 of the Pension Plan Administration Procedures if he is subsequent reinstated as a result of an arbitration decision and if he wishes to be credited with his previous acquired allowable service.


L3.08.04 A terminated /discharged employee who elects a refund from which taxes are deducted or who transfers his refund to a Registered Retirement Savings Plan and subsequently deregisters those monies so that tax is deducted may, 6 months following his reinstatement, apply to have his previous allowable service recognized under the same terms and conditions as are available to a new employee who may have previous service or eligible pre-employment military service. This option will expire with the later of one year from the employee’s date of reinstatement of the effective date of this agreement.


L3.08.05         An employee who does not elect to repay the Fund in accordance with the above will not have any of his pre-discharge/termination allowable service used to determine eligibility for or used in the calculation of any Company pension plan benefit.


L3.09                EARLY PENSION:  The Pension Plan rules will be amended so that effective with the date of ratification, an employee covered by the CUPE Collective Agreement may retire with an unreduced early pension provided s/he is at least 55 years of age, and so that for any employee retiring below age 55 on or after the date of ratification, the denominator described in Clause B of Section 6.2 of the Plan shall be a “figure representing the number of months of allowable service plus the number of months by which the participating employee is below age 55.”


L3.10                ANNUAL COMPENSATION:  The average annual compensation to be used on or after September 1, 1990 will be based on the employee’s best thirty-six (36) successive months of allowable service.


L3.11                INCOME PROTECTION:  Pension
Plan rules will provide for income protection for eligible retirees for a five (5) year period ending December 31, 1995 based on the following formula:


L3.11.01        The annual change in the Consumer Price Index will be calculated to a maximum of eight (8) percent.


L3.11.02        The income protection will be based on a percentage adjustment of fifty (50) percent of the calculation in L3.11.01.


L3.11.03        The application of L3.11.01 and L3.11.02 will take place in each of the years listed below and will occur on the following dates:


January 1, 1993

January 1, 1994

January 1, 1995

January 1, 1996

January 1, 1997

January 1, 1998

                                                                                                January 1, 2001

                                                                          January 1, 2002

                                                                                    January 1, 2003

                                                                                    January 1, 2004           

                                                                                    January 1, 2005

                                                                                    January 1, 2006

                                                                                    January 1, 2007


L3.12                        ELIGIBILITY


L3.12.01        To be eligible for this benefit, a retiree must have achieved the age of sixty (60) on the adjustment date.  Furthermore, eligible

employees who retire within twelve (12) months of the adjustment date will have the adjustment pro-rated in that year.


L3.12.02        Notwithstanding the agreement to make the foregoing Pension Plan rules change for a five (5) year period commencing January 1, 1991, this in no way prevents the Union from re-negotiating this pension agreement at the termination of this Collective Agreement.




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