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  5. Defined Contribution Pension Plan Key Issues and Sample Language
  1. Home
  2. Knowledge Base
  3. Bargaining Committees
  4. Sample Contract Language
  5. Defined Contribution Pension Plan Key Issues and Sample Language

Key issues in the Defined Contribution Proposal

Unifor advocates defined benefit pensions for our members.  The following proposal for a defined contribution (DC) plan is for workplaces where members do not have any pension plan, where the National Office has approved a DC plan, or where the bargaining committee wants to improve the DC plan already in place.

Typical Company Proposals

Union Preferred Language

 

Contributions

 
4.0% of straight time base wage up to 40 hours per week to a max of 1800 hours
  • The percentage of earnings or dollar value of company contributions should recognize the additional risk the member takes on with a defined contribution (DC) plan.
  • If the company has a defined benefit (DB) plan, the company’s current service costs and solvency costs in the DB plan should be considered in setting the DC contributions.
  • Set hours to 2080 per year (no weekly limit)

 

No contributions on overtime
  • Include OT at straight time rate

 

No employee contributions
  • Mandatory employee contributions with 100% or better employer match

 

Limits on contribution periods
  • Expand contribution periods to include hours paid but not worked (vacation, holiday, union etc) and periods of absence for disability, lay-off, pregnancy and parental leave
  • Such periods can be voluntary for the member.

 

Administration  
Member pays all fees
  • Company pays administration fees, investment fees, and member education fees

 

Member must transfer funds out upon leaving
  • Upon termination or retirement, members will have option to leave funds in Plan, purchase an annuity, or convert funds to a LIF at preferential rate

 

Individual accounts
  • Pooled fund with professional investment team

 

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