Volume 31, No. 6		Editor: Bob Rupert		April 26, 2001.



	      WHILE BENEFITS COSTS SOAR: EMPLOYER SITS ON YOUR MONEY



Better sit down.



Bad news is coming--and you'll feel it in your next paycheque.



The cost of benefits is about to soar, effective in May.  You can see what

it will cost you at the bottom of this bulletin.



It would be nice if your salary increased on the same day, but management

hasn't tabled a salary offer yet and your next raise may not come for a while.



The  employer could ease the pain, at least until your pay goes up.  The

employer is sitting on at least $285,000 (accrued interest included) that,

by any fair or reasonable interpretation, is your money.  The money has

been languishing in the employer's account for about a year. That's when

Clarica, which ceases to carry our benefits package on May 1, demutualized.

 In simple terms, demutualization meant that Clarica owed its clients the

equity they had established in the company.  So Clarica wrote a cheque to the 

university for $882,000 because Carleton forwarded the monthly premium. 

But in reality--and we say in law-- the clients are all those who pay the 

premiums, Carleton University and its employees.  CUASA's membership

represents a substantial  portion of Carleton's employee group. We say 

Carleton owes you, collectively, your $285,000 share of that equity, earned

by the premiums you paid. 



So in fairness, and we want to be fair, $552,000  of that demutualization

payout belongs to the employer and other employees, based on the premiums

they paid. The rest belongs to you.



Sound simple?  We think so.  But for reasons that are beyond us, the

employer says it's fair for the employer to get its share of the equity--

and yours, too. There's a way to resolve this, and we've initiated it. 

We've moved the question to arbitration--third- party resolution.  And

we're confident we'll win--and you'll win.



But arbitration takes time--and costs money.  Why should it be necessary

for us to prove that if some of  the premiums that established the equity

in Clarica were yours--an equal proportion of the demutualization rebate

is also yours?



While your union and your employer are at the bargaining table trying to

reach agreement on a salary increase that would restore some or all of the

purchasing power you lost over the lean years, your employer could follow

your union's lead (see below) and use your demutualization rebate to

soften the blow of the huge additional cost of benefits. 



It hasn't happened--yet.



This does not improve the bargaining climate. But it does increase our

determination  to get you a fair salary increase......and soon!



Finally, some good news.  You've  got about $515,000 left in a special

fund, accumulated in 1996-97 when premiums paid into the Long Term

Disability exceeded the cost of the coverage for that period. We've been

using some of that money to subsidize your LTD premiums when they

increased in subsequent years.  Now, for a 12-month period, we will use

what is left to cover about 94 percent of the LTD premium increase that

goes into effect on May 30. This will significantly reduce your increased

benefits costs for a year.



Meanwhile our negotiators are at the table trying, among other things, to

increase your income so you can cover your increased costs of

benefits--and everything else. 

 

	Details of the Premium Increases (effective May 30 paycheque)



Long Term Disability Insurance (LTDI) [salary driven benefit - higher the

salary, higher the premium]

- 97% premium increase

- CUASA members pay 100% of premiums

- example of someone earning $60,000:  premiums increases from $48.60 to

  $96.00 per month but by using the LTD fund created in better times, all

  but around 6% of the increase can be paid on your behalf; but only until

  the fund runs out of money in 1 year; after that premiums will increase

  and there will be no fund left to soften the blow



Basic Life [salary driven benefit - higher the salary, higher the premium]

- CUASA members pay 100% of premiums

- example of someone earning $60,000: premiums increased from $29.16/mo to

  $40.20/month if salary at $60,000 (premium increase at this salary level =

  37.86%)



Health (EHC)

- premium increase of almost 49%

- CUASA members pay 50% of any increase in premiums

- premiums:  	single  9.14/mo increases to $13.61/mo 	[4.47/mo extra]

           	family  31.20/mo increases to $46.55/mo [15.35/mo extra]



Dental

- premium increase of just over 10%

- CUASA members pay 50% of any increase in premiums

- premiums:  	single  4.67/mo increases to $5.15/mo 	[0.48/mo extra]

                family  14.66/mo increases to $16.18/mo [1.52/mo extra]



These results are caused by:  poor financial experience of the group (too

many claims as against premiums paid in); high average age of our group

and the overall risk presented.  All eighteen insurance companies were

invited to bid on our benefit package.  Only three were prepared to bid on

all the plans and one other bid was restricted to only health/dental. 

Clarica wanted a 30% premium overall rate increase, Manulife 26% and Great

West 25% (that's on the total premium paid yearly for all employee

benefits).  In addition, there were other features in both the Clarica and

Manulife quotes (Manulife wanted a deficit guarantee and Clarica wants the

current deficit - which now stands at 2.8 million and is growing - repaid

over 10 years) which left Great West as the only "attractive" option.