Constructive labor and management relations are the foundation of good human resource management and, as such, are very important to Resolute Forest Products' business. Regular dialogue with union leaders, local union representatives and employees at all our operations ensures that these key stakeholders are kept informed and engaged.
We are committed to the collective bargaining process and believe that considering the views of our valued employees and protecting their right to freedom of association are fundamental to our way of doing business. We currently do not have any operations in countries where employees’ rights to exercise freedom of association or collective bargaining may be at significant risk.
The decrease in the number of employees represented by collective bargaining agreements from 2014-2016 is related to natural attrition or retirement.
Labor Relations in 2016
Renewing expired or expiring collective agreements at pulp, paper and wood products operations is one of Resolute’s public commitments, ensuring our competitiveness as an employer while supporting our long-term viability.
In the past year, we renewed or entered into a number of agreements with unions, covering approximately 1,300 employees, primarily in our sawmills and woodlands in Canada. The collective agreements covering approximately 250 employees in Canada either expired in 2016 or are scheduled to expire in 2017, mainly affecting one sawmill and two woodlands operations.
Notice Period for Operational Changes
Resolute aims to be proactive in informing all stakeholders as soon as possible when there is a need for major changes that will affect our employees.
Minimum notice periods for significant operational changes are subject to a variety of national or local standards, including the U.S. Warn Act, the Act respecting labor standards in Quebec, and the Employment Standards Act (2000) in Ontario. Additional conditions are specified in the collective agreements that cover nearly 65% of our employees and are renegotiated and renewed by union leaders and company representatives on a regular basis.
Pension and Other Post-Employment Benefit Plans
Resolute sponsors multiple contributory and non-contributory defined benefit pension plans, in addition to numerous defined contribution plans, for our U.S. and Canadian employees. The company also provides various group insurance plans for employees and other post-employment benefit (OPEB) plans for retirees, depending on the circumstances. Some of the above plans are covered under collective bargaining agreements.
Membership in the Canadian pension plans is mandatory. In 2016, 100% of eligible employees belonged to the mandatory defined benefit pension plans, while 86% of employees participated in the optional defined contribution plans in the United States.
Employee contributions generally range from 0-8% of their salary, but can reach up to 100% in certain locations up to the regulatory limit. Employer contributions range from 2.5-10% of the employee’s salary, depending on the location and applicable collective agreements.
The pension administration committee (PAC) oversees the day-to-day administration and other non-investment responsibilities of the Canadian pension plans, as well as the U.S. pension plans and the U.S. group insurance programs. The pension investment committee (PIC) oversees the investment of plan assets, including the review, update and approval of the investment policies, and monitors investment performance.
We track and report our plans’ obligations, assets and liabilities on an annual basis. The latest assessment is available in our 2016 Form 10-K, along with detailed information on the methods used to calculate these figures.
In 2016, Resolute contributed $141 million to our defined benefit pension plans and $21 million to our defined contribution pension plans, while expensing an aggregate of $62 million. We also made payments of $13 million to OPEB plans, compared to a $12 million credit to the net periodic benefit cost.