"I'll tell you what it's like being an old woman alone who's only got the government pension to live on... It's wearing out your second-hand shoes going from one store to another trying to find the cheapest cuts of meats... It's picking the marked-down fruit and vegetables from the half-rotting stuff in the back of the stores that used to be given by farmers to feed their animals."

"Society is just beginning to recognize the implications of the observation that women's work and the patterns of their working lives are not the same as those of men."

"Corporations have argued against pension indexing on the grounds that it imposes risks and uncertainties on them. We agree that there are risks and uncertainties, but the logic of their position is that pensioners can and should bear this cost. Needless to say, we consider this view morally unacceptable."

The labour movement has long fought for the right of retired workers to a decent standard of living. Although pensions can be a complex issue, the goals for a pension plan have been very clear:

• Provide an income above the poverty line;

• Enable a worker to maintain his/her standard of living after retirement;

• Ensure benefits are regularly adjusted to cost of living increases.

The establishment of the Canada and Quebec Pension Plans (C/QPP) in 1966 was a major step toward achieving these goals. Funded by contributions from workers and employers, the C/QPP could provide decent pension benefits and was accessible to most Canadian workers.

Unfortunately, the C/QPP tends to serve men better than women. Pension benefits are based on a worker's yearly earnings. Women, on average, earn only 64 per cent of men's wages, so most women's pension benefits will be much lower than men's.

Another problem is that workers who take time out of the labour force will reduce their future pension benefits. While workers are allowed time out to care for young children there are no allowances for care of elderly or disabled family members. It is usually women who drop out of the labour force to provide such family care. Women who are full-time homemakers must depend on their partners for pension benefits.

Women are more likely than men to be underemployed. Women work in areas where part-time employment and tech change layoffs are fairly common. Time out of the workforce hurts the pensions of men and women, but women are more likely to be in a position to suffer such penalties.

In 1979, the National Council of Welfare concluded in its report Women and Poverty: "Poverty in old age is largely a women's problem." Despite improvements in pensions, current statistics suggest that poverty continues to be a problem for older women:

• 72 percent of the elderly poor are women

• almost 74 percent of older women are single, and nearly 46 percent of single older women are poor compared to 32 percent of single older men.

To understand women's situation, we must first look at the different kinds of pensions. Pension income is usually described as a three-tiered system: Public pensions, company pensions, and individual retirement savings.

Tier 1: Public Pensions

There are several federal government programs:

• Old Age Security (OAS) is a flat-rate monthly payment for Canadians aged 65 or over. New Canadians may not qualify for a full payment if they have not met residency requirements - despite many years of paying taxes and working in Canada.

• Canada and Quebec Pension Plans (C/QPP) are funded by the contributions of workers, employers, and government. Workers' contributions are based on their wages. Benefits equal 25 percent of a workers' average earnings.

• married and common-law couples can split their pension credits (thus giving full-time homemakers a partial pension). Upon the death of a C/QPP recipient, the surviving partmer or spouse will receive a survivor's benefit. Gay and lesbian couples are denied the right to split pension credits or receive survivor's benefits.

• Guaranteed Income Supplement (GIS) is a monthly payment to OAS pensioners who can pass an income test. New Canadians who do not meet the residence requirements for the OAS cannot collect the GIS even though they may pass the income test.

Tier 2: Company Pensions

These plans vary widely. In some plans the employer and employee contribute; in others only one party may contribute. Benefits also vary. In a defined-benefit plan, retirees usually receive an amount based on their salary and years with the company. In a flat-benefit plan, retirees receive a specified rate, which is multiplied by the years of service with the company. For example, a flat-benefit plan covers CAW members working for Chrysler, GM and Ford.

The CAW has negotiated some good pension plans, but not all bargaining units or unions have the strength to bargain good plans.

Tier 3: Individual Retirement Savings

The federal government created Registered Retirement Savings Plans (RRSPs) to encourage people, particularly those without a company pension, to save for their retirement. In addition to the interest on the RRSP, the investor receives some breaks on his/her federal income tax return.

The federal government recently increased the amount people can invest in RRSPs. The income tax deductions are much more generous to high-income earners than low-income earners. Rather than improve public pensions, the government is putting responsibility on the individual to create a retirement income. In reality, the government has given the wealthy a big tax break, but RRSPs are not very helpful to low income earners.

For the majority of women, there is only one pension plan: public pension. In 1986, only 37 percent of employed women (compared to 52 percent of employed men) were covered by a company pension plan. RRSPs and personal retirement savings are not a practical option. Because women earn less than men, they simply do not have extra funds for investments.

Public pensions do not merely "fill in the gaps" for elderly women. In 1986, the OAS and GIS accounted for more than 45 percent of the income of elderly women. Most elderly women depend on public pensions. But public pensions, as they currently stand, do not adequately compensate women for their years of work in the labour force and in the home.

At the National Pension conference in Ottawa, labour leaders, pensioners, and women's groups protest the inadequacies in pensions for Canadian workers. Business threatens that any improve- ments to the pension system will cut into profits and destroy free enterprise initiatives. (They have raised the same arguments since 1906).

Increasing the C/QPP and OAS benefits would greatly improve the financial situation of elderly women and do away with the GIS. It is also important for the public pension plan to recognize the variety of work patterns among women. Women should not be penalized for having to take time out of the labour force. The drop out period in calculating pension contributions must allow for job retraining and periods of unemployment as well as family care responsibilities.

Almost 90 percent of survivor benefits are paid to women, and most of these women have no pension plan of their own. Survivor benefits must provide adequate standard of living.

In addition to providing decent benefits, the public pension system must be available to all working Canadians. There should not be discrimination against immigrants, gay and lesbian couples, or the disabled, who are often underemployed.

Like most labour organizations, the CAW has placed priority on creating a better public pension system. There are several reasons for favouring a public pension system over private company plans:

• With contributors from across Canada, a national plan can withstand the economic downturns in different geographical regions, job sectors, or time periods. A national plan can ensure a secure pension for all Canadian workers - not just those who had the good luck to work in a particular place, for a particular company, at a particular time.

• One national pension plan with one set of guidelines is more equitable than having many company plans. Standards for company plans differ by province. A part-time worker in Ontario could be eligible for a company pension while a part-timer in BC with the same wages and hours is not eligible.

Company plans are no substitute for a universal pension scheme.

Public pensions offer other benefits which affect women:

• Part-time workers are covered by C/QPP whereas most provinces require part-timers to earn a specified amount before they qualify for the company pension. Many women working part time do not earn enough to qualify.

• C/QPP benefits are fully indexed against inflation on an annual basis to cover cost of living increases. No province requires company plans to provide inflation protection.

• The vesting period is the length of time that a worker must belong to a pension plan before s/he can receive the benefits - both the employer's contribution as well as the worker's contribution. The C/QPP are vested immediately. Some companies have a two-year vesting period, but most require much longer.

• The C/QPP are portable: a worker does not lose his/her pension credits upon changing jobs - even if that new job is in a different province. Company pensions are limited in portability because not all companies have plans or accept a plan started with another company.

Public pensions are especially important as the government attacks social programs through privatization, deregulation, and free trade. More women as well as men will be forced to change jobs in such an economic climate. There is the danger that some workers will end their employment years with a patchwork of company pension plans that amount to very little.

The long term goal is a universal public pension plan. In the short term, the CAW has fought for and won better company pensions for our members. The CAW pension plans negotiated in 1987 in the auto assembly, parts, telecommunications and heavy equipment sectors were landmarks that changed the nature of company pensions in Canada.

At a time when business was crying out that indexed pensions would bring financial ruin, we successfully negotiated:

• a substantial increase in the flat-rate pension benefits to encourage workers to take early retirement

• indexed benefits for all future retirees

• a catch up settlement and inflation protection for current retirees

• the "30 & Out" provision which made it possible for members to retire early without penalty

There are currently two major issues around company pension plans: control over surplus funds and management of pension funds.

Control over surplus funds

By law the pension fund must have enough assets to cover future payments to retirees. When the assets are greater than the needed amount, some employers claim there is a "surplus". Some employers also believe that this surplus belongs to them and often get approval from the pension commission to remove it.

In 1986, Ontario NDP leader Bob Rae called the withdrawal of surplus pension funds "legalized theft." Rae condemned the wealthy businessman Conrad Black and Dominion Stores for taking over $62 million from the store workers' pension fund. The public was outraged. The Ontario Supreme Court, under heavy political pressure, ruled that Dominion Stores must return $56 million to the pension fund.

Ontario introduced legislation to stop surplus withdrawals, but companies can still close a plan and take the surplus. Surplus withdrawals still continue in many provinces.

These "surplus" funds are not really surplus. They are deferred wages and belong to the workers. They should be used to index future pensions and help current retirees. It is unfair for the company to take advantage of a strong pension fund while current retirees struggle on meagre pensions eaten away by inflation.

Management of Pension Funds

In 1989 Canadian pension funds has assets of over $176 billion. Pension money is usually managed by financial institutions with very conservative interests.

• Union pension money has been invested in South African companies despite Canada's condemnation of apartheid and trade boycott on South Africa

• in the U.S., the Right-To-Work Committee, and anti-union organization used union pension funds to build its luxury headquarters in Washington, D.C.

Certainly unions want their pension money to be invested wisely and to bring a good financial return. By having come control over investments, unions could set more ethical guidelines for investment. Rather than make a quick profit by investing in a non-union company, unions could promote investments in unionized companies with good labour relations. Such investments would strengthen unions and help maintain union jobs.

There are other investment possibilities which, in the long term, benefit workers and their families: affordable housing, community development projects, child care centres, retirement homes.

Pension funds hold massive amounts of money. The investment of these funds can have a major effect on the economic and social well-being of Canadian communities. It is therefore important that workers become involved in the management of pension funds.

Pensions are just too important to ignore. Take the time to learn about pensions.

Encourage retirees to organize a chapter in your local.

Encourage women to get involved with the pension issue. Some women may feel overwhelmed and reluctant. Be active in your encouragement! You might point out that most people - women and men - find pensions confusing at first. With some reading and discussion, pensions can be mastered.

Learn about the ways in which pensions currently discriminate against women, lesbian and gay couples, immigrants, and people with disabilities.

Ask provincial and federal politicians for their position on pension reform.

Canadian Auto Workers, Retirees or
Women's Department, 205 Placer Court,
North York, Ont. M2H 3H9 (416)497-4110

Canadian Labour Congress, Women's
Bureau, has a brochure "Women and
Pensions." CLC, 2841 Riverside Drive,
Ottawa, Ont., K1V 8X7. (613)521-3400. Or
contact the CLC office in your region.

Government of Canada Veterans Affairs has free booklets
on pension benefits for veterans.

Health and Welfare Canada has free booklets
and papers entitled "Your Canada Pension
Plan." Topics include: Survivor Benefits,
Disability Benefits, Retirement Pension,
GIS, and OAS.

Finlayson, Anne. (1989) Whose Money is It
Anyway? The Showdown on Pensions.
Toronto: Penguin. A very readable book with
excellent information on the politics behind public and
company pensions.

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