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Retirees ask Rio Tinto to increase pension index to match inflation

A pension lobby group is calling on aluminum giant Rio Tinto to increase its retirees’ pension to cope with high inflation.
Rio Tinto Alcan’s aluminum smelter at Kitimat. (Rio Tinto)

A pension lobby group is calling on aluminum giant Rio Tinto to increase its retirees’ pension to cope with high inflation.

ActiPension Association, a non-unionized organization consisting of Rio Tinto retirees from Quebec and B.C. where the aluminum giant operates in Canada, is representing nearly 1,800 former employees who retired in the 1980s.

“Since 2011, retirees and beneficiaries of the Rio Tinto Alcan Pension Plan, have not seen any augmentation,” said the association’s president Denis Bernard.

This was until last month, when Rio Tinto increased the pension index by 3.24 per cent on Oct.1.

The Rio Tinto Pension Plan has 6,847 retirees and beneficiaries located mostly in Québec and British Colombia. They are retired staff, non-unionized retirees from two plants in Québec and all unionized workers from Kitimat/Kemano.

A spokesperson for the aluminum company said, The Rio Tinto Alcan Pension Plan, a registered pension plan, has been amended to increase the pensions as of October 1, 2022 for eligible recipients (including RTA BC Works retirees) pursuant to the applicable Indexation and Use of Surplus Policy.

However, this increase does not correspond to the inflation at hand and reduces the purchasing power of these pensioners, says Bernard. The group is asking Rio Tinto to match the inflation.

“This year the inflation is at seven to eight per cent and we’ve had a three per cent increase,” he said. “This is the worst year in terms of the loss of purchasing power in the last 20 years.”

For example, a person retired in 2012, has already lost almost 20 per cent of purchasing power and a person who retired in 2002, has lost 25 per cent, he claimed.

While Rio Tinto is not legally obligated to augment the percentage, Bernard says they are lobbying the company to show “goodwill” and “compassion” towards its retirees.

Bernard added that while Rio Tinto has always been managing the pension fund by the book, the retirees are living in a very “extraordinary situation of high inflation.”

“They have increased the salary of their active employees by three per cent in July, and that’s in addition to their normal raised pay,” said Bernard, further adding, “The company invoked adverse economic circumstances to justify this special increase in salary. Retirees and beneficiaries, who suffer from the same economic conditions as active employees have received nothing.”

At the same time, Bernard also said Rio Tinto reported a profit of $2.4 billion in 2021.

“Rio Tinto has no financial problem and we think the company should distribute some of this wealth back to their pioneers who helped building the company.”

About the Author: Binny Paul

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