Retiree Chair Report By Fred Dougan April 2017
I am pleased to report that we had a meeting of the people who want to be involved with our chapter’s Recreation Committee. The meeting went very well. But we still need to elect a Chairperson for the committee that is now somewhat off the ground. We will see how things go. In the meantime, John Neely will have more to say about all of this at our next chapter meeting under the Recreation Committee report.
Otherwise, things are going very good with respect to both the Retirees Executive Board and the Local 199 Executive Board. I am glad to finally see the arrival of Spring and nicer weather.
I want to take this opportunity to speak about the ongoing issue of our active members opting to take the commuted value of their pensions. I think the popularity of this option is like a runaway train. I really worry about what will happen to these people and their spouses who will not be able to collect a spousal pension if they die. Past history has revealed that there is a bad track record when it comes to workers taking their pension monies in a commuted lump sum. This is the case because they will have nothing down the road except for CPP and Old Age Security pensions. I realise that this is not a one size fits all situation. But when you hear about someone that is taking commuted value, you must immediately think of the consequences for their spouses and other members of their immediate family.
I have heard many reports about people needing a new roof on their house or a new car or having an immediate need for money for their children and are expecting that they are going to be paid back by their children and then the money is not available for the retired worker in the future.
Furthermore, given that the GM pension fund is going to be fully funded by 2020, I believe that the commuted value option should be stopped dead in its tracks. If it is, the kinds of horror stories I have mentioned, will not continue to happen.
Something else should be considered as well. It was the Company that wanted the commuted value option to be available to our members when they retire. GM did not demand this for our benefit. GM wanted it to drastically reduce their legacy costs. This means the commuted value retirement option complements the big gain GM made when the Health Care Trust was set up.
In addition, we must recognise that the people who are taking the commuted value option almost never pay dues into Retired Workers Chapters. This will be devastating for the future of our Retired Workers Chapters because we will end up with much less money to operate with.