An arbitrator has accepted Canada Post's proposal for a new collective agreement with its postmasters and assistants in rural offices across the country.

Key changes under the agreement include a defined contribution pension plan for new employees represented by the Canadian Postmasters and Assistants Association.

There are also changes to entry-level wages for new CPAA members as well as an increase in the employees' share of contributions towards post-retirement benefits.

Canada Post says there's a "modest" wage increase for current employees — but details weren't announced.

The union represents 5,000 rural postal service employees. It had agreed to break a bargaining impasse by having arbitrator Michel Picher make the final selection after both sides presented their proposals.

Union president Brenda McAuley said in a telephone interview from Ottawa that the arbitrator's decision is a "really sad day for the Canadian Postmasters and Assistants Association."

She said that new members in her 114-year-old union won't have the security of a defined benefit pension. She also lamented having one pay scale for new hires and another for established employees.

'Done deal'

"We went to final-offer arbitration because we did not want to sell out the next generation of Canadian workers," McAuley said

But she views it a "done deal" because "the arbitrator's decision needs to be respected."

The Crown corporation remains at odds with its largest union, the Canadian Union of Postal Workers (CUPW), which is the only remaining employee group that hasn't accepted a defined contribution pension plan for new employees.

CUPW, which represents 50,000 workers, has been determined to keep defined benefit pension plans for newer workers.

McAuley said the bigger CUPW union — which has members in rural areas that deliver mail and work with CPAA members working from corporate and home offices — are fighting the same battle with Canada Post.

"They do not want their new employees to go into defined contribution for the same reasons . . . They don't want to sell out the next generation of workers."

With defined contribution pension plans, employers contribute a set amount to an employee's retirement savings and the amount they receive when they stop working depends on how well those investments perform.

With defined benefit plans, employees earn a specific amount of pension that they will receive when they retire regardless of how the pension fund's investments fare.