Frequently Asked Questions on the Memorandum of Agreement (updated September 28, 2023)

Memorandum of Agreement relating to surplus sharing under the Canadian Broadcasting Corporation Pension Plan and to cost management under the Canadian Broadcasting Corporation Supplementary Health Care Plan

Q:  What is the arbitration decision on the 2009 benefits and pension agreement about?

A: In 2019, the Corporation said it was unilaterally terminating the Memorandum of Agreement that it had signed with its unions and the CBC Pensioners National Association (PNA) in 2009. This Agreement provides for two things:

  1. The equal sharing of pension plan surpluses between the Corporation and members of the plan; and
  2. The setting up of a Health Care Fund to pay for out-of-the-ordinary increases in the cost of employee health care benefits.

The unions and the PNA challenged the Corporation’s attempt to terminate the Agreement, and took the Corporation to arbitration to ensure that members’ rights were protected. The arbitration decision issued on June 9, 2023 agrees with the unions and the PNA, that the Corporation could not terminate the Agreement and that the Agreement remains in effect. In his decision, arbitrator Justice Dennis O’Connor wrote the following:

“I make the following Award:

(a) A Declaration that the MOA is a valid and subsisting contract between the parties and that the notice of termination dated December 13, 2019 by which CBC/Radio Canada purported to give three months’ notice of its intention to terminate this agreement is of no force or effect and does not operate to terminate the MOA;

 (b) An Order that CBC/Radio-Canada forthwith recognize STTRC as a full party to the MOA, and meet with the CCSB to reach any necessary agreements on the implementation of this Order.”

This decision means that all provisions of the Agreement remain in full force and effect and that the Corporation must meet its obligations to share pension surplus, consistent with the terms of the agreement. The decision also removes any uncertainty about the status of the Health Care Fund, which was created by employee contributions of 0.1% of their wage increases from 2009-2019  to ensure there is no elimination or reduction in employee benefits as costs rise. The decision confirms the unions’ oversight of the Fund and its use through the unions’ participation on the Consultative Committee on Staff Benefits (CCSB).

The Arbitrator also ruled  that STTRC is a full party to the agreement. This means that all unionized employees have all of the rights provided by the Agreement.

Q:  How much money are we talking about?

A:  The 2009 Agreement calls for an equal distribution of pension surpluses between the CBC and contributors to the pension plan (current staff and retirees). In a surplus position, defined by specific federally regulated criteria on pension solvency, CBC is required by law to forego making employer contributions to the pension plan. There have been two such so-called “contribution holidays” in the past two years for the Corporation, totalling around $95 million.

As for the Health Care Fund, it is our understanding that it presently contains more than $40 million, though we have not had proper updating of its status since 2019 when the Corporation purported to terminate the 2009 Agreement.  As noted above, the Fund is intended to be used as a reserve in circumstances where annual healthcare costs exceed an agreed upon threshold.

Q:  How much will each pension plan member receive?

A:  The amounts will vary from person to person. There is some complicated math to do, but the payout amounts can be expected to be based on the amount that each pension plan member contributed. Eligible members of the plan will include current employees, deferred pensioners, as well as surviving spouses and surviving children.

Q:  When will I get my share of the pension surplus?

A:  The CBC has committed to providing payments by the end of this year. It is expected that there will be two separate payments, one for each year of surplus. As mentioned, there is some complicated math to do, and this needs to be done by the pension plan’s actuaries.

Q:  How about next steps?

A:  On June 23, CBC published an update on iO, indicating that the Corporation is “committed to working with the unions and the PNA to continue implementing the MOA, including as it relates to pension surplus sharing.”  The CBC Pension Administration continues to work to complete the calculations necessary for a payout of pension surplus to retirees and employees. However, we are still awaiting the approval of distribution of funds from the pension regulator. The Office of the Superintendent of Financial Institutions (OSFI) oversees the security of pensions and ensures that pension plans meet their obligations to contributors. Approval from OSFI is necessary to proceed with surplus sharing. This means we cannot provide a firm timeline as to when payout will occur, although we still hope this can be completed before the end of the year. In the meantime, we will continue to work with the CBC to ensure that everything is in place to expedite payments as soon as approval is given.

Q: Is the payout taxable?

A:  Yes, however those with RRSP eligibility will be able to have some or all of their payout sent directly to their RRSP account. Unfortunately, those without RRSP room or access to RRSP shelters will have the CRA minimum deducted at the time of the payout. Money cannot be directly transferred into a RRIF after it’s been created. If you have specific questions, we recommend that you speak with a financial adviser.

Q: I am concerned about tax implications of the payout and the possible impact on my Old Age Security (OAS). Is it possible to have the surplus payout moved to next year?

A: The simple answer is no. The payout schedule for this year is based on two previous surpluses and payouts under the Memorandum of Agreement (MOA) are already past due. Because it covers surpluses from both 2021 and 2022, more than 40,000 individual payments must be calculated. So, there is no provision in the agreement that would provide for customized individual payouts. Additionally, the plan continues to perform well and there is every possibility there will be another payout in 2024.  As to OAS reductions, no reduction takes place until income exceeds about $80,000. Also, any monies deducted from OAS do count as a tax credit. We urge those concerned about tax implications to seek independent financial advice.

The CBC plan covers a variety of people with a variety of financial situations and needs. Delaying a payment might provide some tax advantage to some but may also severely disadvantage others.  Our duty to pensioners is to do the best we can to ensure the spirit and intent of the MOA are respected and the rules are followed.

Q: Is it possible to know how much we are getting so we can plan for it?

A: That ultimately is the plan. At this point, the calculations have not been completed so the individual amounts aren’t yet known. Contributors will be contacted with that information before receiving payment. You will be contacted by the Pension Plan Administration. Please ensure they have your current contact information.

Q: What about post-retirement spouses who are currently disqualified from inheriting pension payments?

A: “Post-retirement spouses” who married after the pensioner retired and began to collect a pension, do not qualify for a payout.

Q: If a member dies prior to payout, what does the legally recognized surviving spouse receive? Is it the same amount, or a pro-rated reduced amount?

A: The amount received depends on the date of death.  Two surpluses have been declared – one for 2021 and 2022.  If the retiree died during one of those two calendar years, they should be entitled to a full share up to the point where the survivor pension began.  At that point, the surviving spouse beneficiary would get 60% of the retiree’s payout.

Q: What happens to the money in the case of a member who dies, has no spouse, and whose estate is still in process?

A: Any money owed would go to the estate of the deceased.

These FAQs will be updated when we have more information.