Agreement in principle between the Government represented by

Agreement in principle between the Government, represented by the Conseil du trésor, and the organisations forming the CSN-FTQ-SISP Common Front

Duration of the collective agreement 5 years from April 1, 2010 to March 31, 2015

Pay • Fixed pay increases And new innovative provisions… • Potential increases tied to the nominal Gross Domestic Product (GDP) • Potential increase tied to inflation

Maximum potential increases Fixed pay increases Potential increases tied to the nominal GDP Potential increase tied to inflation Maximum potential increases April 1, 2010 0. 5% April 1, 2011 0. 75% April 1, 2012 1. 0% 0. 5% 1. 5% April 1, 2013 1. 75% 1. 5% 3. 25% April 1, 2014 2% 1. 5% 3. 5% March 31, 2015 Total 1% 6% 3. 5% 1% 1% 10. 5%

Fixed pay increases • • • April 1, 2010 April 1, 2011 April 1, 2012 April 1, 2013 April 1, 2014 Total 0. 5% 0. 75% 1% 1. 75% 2% 6%

Potential increases tied to the nominal GDP If the sum of the nominal GDP increases exceeds the government’s predictions in its plan for a return to a balanced budget, fixed pay increases will be supplemented

Potential increases tied to the nominal GDP The nominal GDP is not the real GDP with which we are more familiar. The nominal GDP is higher because it includes inflation. Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Real GDP 6. 4% 4. 4% 1. 4% 2. 7% 1. 2% 2. 7% 1. 9% 2. 2% 1% 3. 9% 4. 8% 3. 5% 3. 7% 5. 4% 1. 6 % Nominal 7. 4% 6. 7% GDP 3% 4. 2%

Potential increases tied to the nominal GDP • April 1, 2012 0. 5% • April 1, 2013 1. 5% • April 1, 2014 1. 5% Total potential 3. 5 % To be added to fixed pay increases

How does it work? Year Government’s predictions on nominal GDP Potential increases tied to the nominal GDP 2010 3. 8% 2011 4. 5% 2012 4. 4% 0. 5% 2013 4. 3% 1. 5% 2014 1. 5% The fixed pay raise for 2012 may be increased by up to 0. 5% if the total increase in the nominal GDP for 2010 and 2011 exceeds 8. 3% (3. 8% + 4. 5%)

How does it work? Year Government’ s predictions on nominal GDP Potential increases tied to the nominal GDP 2010 3. 8% 2011 4. 5% 2012 4. 4% 0. 5% 2013 4. 3% 1. 5% 2014 1. 5% The fixed pay raise for 2013 may be increased by up to 2%, minus whatever is obtained in 2012, if the total increase in the nominal GDP for 2010, 2011 and 2012 exceeds 12. 7% (3. 8% + 4. 5% + 4. 4%)

How does it work? Year Government’ s predictions on nominal GDP Potential increases tied to the nominal GDP 2010 3. 8% 2011 4. 5% 2012 4. 4% 0. 5% 2013 4. 3% 1. 5% 2014 1. 5% The fixed pay raise for 2014 may be increased by up to 3. 5%, minus whatever is obtained in 2012 and 2013, if the total increase in the nominal GDP for 2010, 2011, 2012 and 2013 exceeds 17% (3. 8% + 4. 5% + 4. 4% + 4. 3%)

Potential increases tied to the nominal GDP A calculation to our advantage If the nominal GDP grows 0. 1% more than the government predicts, employees receive a raise of 0. 125%

Example for April 1, 2012 In 2012, in order to access the potential 0. 5% increase tied to the nominal GDP, the total increase in the nominal GDP for 2010 and 2011 must exceed the 8. 3% predicted by the government Fixed pay increase Total increase in the nominal GDP for 2010 and 2011 1% 7. 5% ↓ 8. 3% ↓ 8. 4% ↓ 8. 5% ↓ 8. 6% ↓ 8. 7 % ↓ 8. 8% ↓ Potential increase tied to the nominal GDP 0% 0% 0. 125% 0, 375% 0. 5 % Total increase 1% 1% 1. 125% 1. 375% 1. 5%

Potential increases tied to the nominal GDP The concrete advantage: If the total growth in the nominal GDP exceeds government’s predictions by 2. 8% over the first four years of the collective agreement, we will reach the maximum of 3. 5% in potential increases tied to nominal GPD

Potential increase tied to inflation If inflation over the life of the collective agreement is greater than the fixed increases plus increases tied to the nominal GDP… • Pay rates will be adjusted by up to 1% • The pay adjustment will take effect on March 31, 2015, which is the last day of the collective agreement Total potential 1%

Pension plan The agreement in principle reached on the pension plan allows for : • More secure benefits • Stabilized pension contributions based on parameters put forward by the Common Front

Pension plan Limited variation in the contribution rate • • For 2011, 2012 and 2013, the maximum variation in the contribution rate will be limited to 0. 5% For subsequent years, the maximum variation will be the difference between the required contribution and the current contribution divided by 3

Pension plan Concrete effects of this limited variation in the contribution rate Year Predicted contribution rate based on the actual valuation method Maximum annual contribution rate based on the new valuation method 2011 11% 8. 19% + (0. 5%) = 8. 69% 2012 11% 8. 69% + (0. 5%) = 9. 19%

Pension plan Change in the contribution formula • The portion of earnings exempt from contributions, now equal to 35% of Maximum Pensionable Earnings (MPE), will be reduced to 25% of MPE (MPE in 2010 = $47 200) • The change will be phased in gradually over a 5 year period, starting on January 1, 2012

Pension plan Change in the contribution formula • Employees who have a salary equal to or higher than the MPE will benefit from a reduction in their contributions • Employees whose salary is lower than the MPE will not be affected by this and will not pay more in contributions • The shortfall in contributions in the participants’ fund will be absorbed either through savings made in the pension plan itself or by the government

Pension plan Indexation After each actuarial valuation, if the surplus is of more than 20% of liabilities and is sufficient to cover costs imputable to the participants’ fund, there will be indexation. It will cover contributions between July 1, 1982 and December 31, 1999 It will be calculated according to the same formula used since January 1, 2000: CPI minus 3%, with a minimum of 50% of the CPI This agreement only covers the part of benefits imputable to the participants’ fund. The governement does not undertake in advance to index the part of benefits imputable to it.

Pension plan Starting on January 1, 2011, possibility of contributing for more than 35 years to increase benefits • A new cap of 38 years of effective service will be introduced • Pension benefits could reach up to 76% of pay (2% per year) • The 36 th, 37 th and 38 th years of contributory service will not be coordinated with the Québec Pension Plan. Therefore, they will be recognized in full at 2%, even after the pensioner turns 65 years of age • No retroactive contribution or buybacks will be allowed • This measure does not change in any way the criteria allowing for retirement after 35 years of service for those who wish to leave at that moment

Pension plan Updating of the tables of rates for buying back service • The new tables will be applicable as of January 1, 2011 • They will be established age by age • They will be revised after each full actuarial valuation (every 3 years) • The costs of buybacks will be more equitable between participants

Pension plan Use of the bank of 90 days Given that since the year 2000, employees can contribute to the pension plan for all their absences… • As of January 1, 2011, use of the bank of 90 days will be limited to parental leave

Pension plan Pension credits were used in particular to buy back years worked before the RREGOP was created in 1973 • People who are presently eligible to buy back years worked before 1973, will be allowed to do so until December 31, 2010 • As of January 1, 2011, it will no longer be possible to acquire these pension credits

Pension plan Employer demands withdrawn • Introduction of an actuarial penalty for people who would have retired with 35 years of service but without having reached the 55 years of age • Raise the actuarial penalty from 4% to 6% per year of early retirement • Introduction of stricter clauses when employees come back to work after retiring

Parental rights Our Common Front demand aimed at updating our collective agreements to bring them into line with: • The Act respecting labour standards • The Act respecting parental insurance • The Employment insurance Act

Parental rights Collective agreements will incorporate : • Additional grounds for splitting maternity, paternity or adoption leave set out in the Act respecting labour standards • The possibility of splitting parental leave (52 weeks) on the same grounds • An extension of the length of time that a suspension of maternity, paternity, adoption or parental leave can last • A 3 weeks’ advance notice to be given for taking paternity, adoption or parental leave

Parental rights • Same compensation for paternity and adoption leave ü 5 days paid 100% ü 5 weeks paid 100%, in link with the Québec Parental Insurance Plan or the Employment Insurance Plan, to be taken within 52 weeks of the birth or adoption of the child, with the same possibilities of extensions üSocial benefits maintained during the paternity or adoption leave üEmployees returning from paternity or adoption leave will have the same rights as employees returning from adoption or maternity leave

Parental rights Leave for parental responsibilities becomes leave for family responsibilities • Extended to cover the father, mother, spouse… • The number of days of leave goes from 6 to 10

Parental rights Other gains • There will be no more obligation to payback benefits to the employer when the adoption does not go through • Some inconsistencies in the calculation of benefits when an employee works for more than one employer are ironed out

Skilled workers A joint inter-sectoral working group on skilled wokers is set up • Composition : 5 union representatives and 5 employer representatives • Mandate : To examine the situation regarding the attraction and retention of personnel in the skilled worker job titles in the public and parapublic sector • Recommendations : The working group will file joint or seperate recommendations by December 31, 2011

Skilled workers The job titles that will be analysed by the working group appear on page 14 of the consultation document

Have a good debate !