The pensions of Toyota workers are “vulnerable” while Unifor’s Detroit Three employees have greater control over their retirement income, a recent workshop on pensions heard.

The seminar, held in Kitchener for Toyota workers, saw a breakdown of Toyota’s defined benefit and defined contribution plans compared to the Detroit Three.

While Toyota plans promise good returns, the automaker has already cut it twice in recent years and may do so again, said Cammie Peirce, Unifor national representative, pension and benefits department.

“They are vulnerable, Toyota can change it as they wish and they have twice already. There is value in having it in contract language,” she said.

In 2012 Toyota reduced indexing in its defined benefit pension plan, reducing the benefit on retirement. It altered the formula based on cost of living increases, not a set dollar amount, so it’s not known how much it will be reduced.

More recently Toyota announced all new hires will only receive the defined contribution plan, not the more generous defined benefit plan enjoyed by current full time workers.

Those moves are puzzling as Toyota remains the global leader in auto sales, has nearly $40 billion in cash on hand and only about 89 people have retired from its Canadian operations, meaning there was no economic reason for Toyota to slash its pension benefits.

“Why did they go to a DC plan? They are profitable, there are very few on their pension.”

While Unifor bargained a defined contribution plan for new workers at CAMI Assembly in Ingersoll, it also bargained to make contract workers, who had no pension at all, permanent employees.

“That’s a case of how a defined contribution plan is better than no pension at all,” she said.

“We have negotiated going to a DC plan from a DB plan in some cases, to keep a plant up and running.”

Peirce also pointed to good pension benefits at Toyota, such as its bridging formula for early retirees, saying workers will keep that when they join with Unifor.

“They don’t get a Chrysler contract, they will bargain their own and they will maintain what they have,” and even grow it, she added.

Pensions