PensionInfo committee rebuttal to Wajax Response to pension surplus challenge

Since the December 15, 2000 E-Mail/Mail message sent to all of you titled PensionInfo, we have received only two responses from Wajax management - one on December 18, 2000 saying that they would respond soon and their response letter of December 22, 2000. Your committee felt that this letter was totally misleading and chose to rebut it piece by piece which we have done over the past few weeks. We invited management again to point out any errors in our statements and by their silence can only assume that they agree that everything that we have stated is true and correct.  We are now consolidating all the rebuttals in sequence and posting as PensionInfo committee rebuttal February 21, 2001.
 
Point #1
Mr. Ball stated that the Pension Plan Info message was from some former employees.
This is absolutely incorrect. The message was from a widespread group of employees, who for obvious reasons, cannot be identified.  Messrs. Cunningham and Donaldson agreed to be the "Front" people for the Committee.

Mr. Ball suggests that we contend that the conversion was done in an inappropriate way.
At this point in time our only contention is that the surplus belongs to the employees as it was their contributions that wholly built this surplus.

Mr. Ball states "surplus funds are only paid out when plans are terminated"
We are told that, like Wajax, a certain competitor recently changed their plan from Defined Benefit to Defined Contribution and shared the surplus with employees.  We are aware of dozens of instances where surpluses in ongoing plans have been shared with or given totally to employees either in increased pensions or contribution holidays for the employees. (i.e. CMHC, CBC and a multitude of others).  Obviously these employers take more of an interest in their employees than Wajax


Mr. Ball states "we have improved pensions for our retirees"
We find it strange that present management takes credit for this.  From 1967 to 1995 upgrades have been made to pensioners and employee pensions usually every three years.  Since 1995 there hasn't been upgrades to either pensioners or employees.  Now there is a very small one for pensioners but nothing for us employees.  Is this fair?  You would think that the very least they could have done would have been to use a small part of the surplus and given us the upgrades that we deserved since 1995 before calculating our "Conversion Values" for the new plan. 

Point#5
Mr. Ball states "it is a well known fact that the Company has taken contribution holidays"
In fact, the Company has taken one continual contribution holiday since 1986 and it seems to intend to take such well into the future.  Many employees tell us that they have been asking for years how much the Company contributed without getting a straight answer. At least now we know the facts.

Point#6
 Mr. Ball states "The Income Tax Act prohibits contributions when the plan is in surplus"
This is correct: However in Wajax's case only the Company took the contribution holiday and the employees kept paying.  In many cases in recent years surpluses have been handled with both sides taking a contribution holiday (for example CBC and others).


Point#7
Mr. Ball infers that after adjustments the surplus will be quite a small amount.
This raises the question: If it is a small amount, why won't the Company give us an estimate of the surplus before and after the adjustments that Mr. Ball mentions?  Is it because the surplus is really in the range of $15 million as suggested in our PensionInfo message and do they consider $15M a small amount?

Point#8
Mr. Ball states "The balance of the surplus will offset transition costs"
What are "transition costs" that could possibly eat up $15 Million? We've asked other companies that have done similar conversions and they say that the only thing they would call transition cost would be a small legal expense.  Again, why will the Company not state what these costs are how much?

Point#9
Mr. Ball states that the current plan was unpopular with the employees.
This is correct.  The majority of us were dissatisfied with the old plan mainly because it was always rumored that the company was not contributing and we welcomed the new plan because we felt the company would be matching our contributions.  Now we find its our own surplus  funds that will be  doing the matching not the company.

Mr. Ball states "In the new plan our participation will be almost 70%"
Is this an intentionally vague statement using the words "our participation" rather than "our cost" ?  If (as we suspect) they are intending to use our surplus to fund the Company's contributions to the new plan,  they are calling the use of our surplus "their participation".

Point#11 
Mr. Ball states "Rest assured employees have and will be treated fairly and with dignity both now and in the future"
This quote is from Mr. Ball's letter of December 18, 2000. If the handling of our pension plan surplus is an example of fair treatment, we would hate to see an example of unfair treatment.

If you are a member of the Wajax Pension Plan or pensioner and have not contributed $100. towards this challenge please do so now.    (I wish to contribute)