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 2012-2014 is related to natural attrition or retirement.
Labor Relations in 2014
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 United States, Resolute, the United Steel Workers (USW), the International Brotherhood of Electrical Workers (IBEW) and the United Association of Journeymen and Apprentices of the Plumbing, Pipefitting and Sprinkler Fitting Industry of the U.S. and Canada (UA) renewed, prior to their expiration, the collective agreements of our mills at Catawba (South Carolina) and Calhoun (Tennessee). These agreements now expire in 2019.
At the same time, collective agreements were renewed for our mills at Coosa Pines (Alabama) and Augusta (Georgia); they now expire in 2020. These four mills represent 35% of our pulp and paper production capacity.
In Canada, an agreement in principle was entered into between Unifor and Resolute to renew the collective agreements for a four-year period. It was ratified by a strong majority of union members in each mill covered by the agreement. This agreement was replicated with the United Association of Plumbers and Steamfitters (UAPS), the IBEW, the International Association of Machinists and Aerospace Workers (IAMAW) and the International Union of Operating Engineers (IUOE). Collectively, these agreements cover eight pulp and paper mills in Canada, accounting for over 37% of our pulp and paper capacity.
We also entered into an agreement with Unifor to renew the collective agreements for periods of four to six years, covering approximately 500 employees in four sawmills in Canada. In addition, we reached a six-year agreement with USW, representing our hourly employees working at the Ignace (Ontario) sawmill.
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 70% 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 2014, 100% of eligible employees belonged to the mandatory defined benefit pension plans, while 84% 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.
Our plan assets and cash contributions to the plans have been sufficient to provide pension benefits to pension plan members and meet the funding requirements of the Employee Retirement Income Security Act of 1974 in the United States and applicable legislation in Canada.
The funding of our material registered Canadian defined benefit pension plans, which we refer to as the “affected plans” in our 2014 Form 10-K, representing approximately 70% of our unfunded pension obligations as of December 31, 2014, is governed by regulations specific to us, adopted by the provinces of Ontario and Quebec. We refer to these regulations, the effect of which will lapse in 2020, as the “funding relief regulations.”
The basic amount of our aggregate annual contribution in respect of the solvency deficits in the affected plans for each year until 2020 is set at C$80 million, and the funding relief regulations include a requirement to make a supplemental contribution, beginning in 2016, subject to certain conditions.
Our plan assets and cash contributions to the Canadian pension plans have been sufficient to provide pension benefits to plan members and meet the funding requirements of applicable legislation in Canada, specifically the cash contributions required for our material registered Canadian pension plans based on the funding relief regulations.
We track and report our plans’ obligations, assets and liabilities on an annual basis. The latest assessment is available in our 2014 Form 10-K, along with detailed information on the methods used to calculate these figures.
In 2014, Resolute contributed $142 million to our defined benefit pension plans and $22 million to our defined contribution pension plans. We also made payments of $19 million to our OPEB plans.