Pension improvement for VON members

On January 22, Arbitrator William Kaplan issued an arbitration decision, ruling that the VON is required to make significant pension improvements for more than 1,600 active members of the VON Canada Pension Plan represented by six unions, including ONA.

“Despite everything that is thrown at our VON members, you continue to step us and provide care to those in need in your communities,” says ONA Provincial President Erin Ariss. “All workers deserve to retire in dignity, and by sticking together and fighting back with our allies, VON members will now receive a pension that is more in line with health-care industry standards.”

It was a very long time coming. Almost 20 years, in fact.

Background

In response to a plan deficit in 2006, VON imposed a major cut that reduced the rate in which plan members earn benefits by one-third, which has remained in place ever since. 

In 2010, the six unions secured an agreement from VON that included pension plan commitments, including that benefits be restored to pre-2006 levels once the plan had a sufficient surplus. It took another three years to secure a second pension agreement from VON, including a commitment for additional benefit improvements once the 2006 cuts had been reversed. 

In recent years, the pension plan’s health has been steadily improving. So, in 2020, ONA and our fellow five unions, believing the required conditions had been met, told VON it was time to finally fulfill its commitment to restore plan benefits. 

In the absence of any changes to the plan, we filed grievances seeking VON compliance with the 2010 agreement. We then attempted settlement talks with VON, which were unsuccessful. The dispute went to arbitration in 2024.

The Decision

Highlights of the Kaplan decision, which also covers the 2013 agreement to increase benefits for pensioners, include: 

• Active plan members are expected to see the basic pension formula restored to nearly what it was before the 2006 cuts. 
• Going forward, active plan members will also earn pension entitlements on future service (work performed in the future) at the pre-2006 rate. For most members, this means every day you work, you will be earning about 50 per cent more pension than recent years. 
• Pensioners who earned a pension after January 1, 2006 are expected to see a one-time benefit indexation improvement applied to their pensions, effective December 11, 2024. 
• All retired plan members currently receiving a pension will see an additional $3.1 million of pension plan surplus allocated to a one-time benefit indexation improvement. 
•  VON will be required to use an additional $12 million of plan surplus for further indexation improvements for pensioners. 
• Going forward, VON will be required to contribute at least the same amount as members to the pension plan. 
• Member contribution rates may change in future years (up or down) as a result of this decision, but contributions will continue to be based strictly on the amounts required to properly fund accruing pension benefits. 

During settlement discussions prior to arbitration, the unions and VON discussed merging the VON pension plan with other larger public-sector plans in Ontario and Nova Scotia, and while this decision doesn’t order this change, it directs parties to continue those exploratory talks. ONA will only agree to a merger if we feel it's in the best interest of our members. 

Work on implementing this decision is ongoing. 

Please note the above information is only a very high-level summary; we encourage you to read more details on our website.