The Retirees' Newsletter
The Faculty and Librarian Retirees' Association, University of Windsor, Windsor, Canada
Issue # 15 -- December, 1995
THE LETTER BOX (cont'd from page 6)
A REPLY TO VAL CERVIN'S LETTER
Elsewhere in this issue is a letter from Val Cervin which contains some sweeping statements which are not backed by any reference to hard facts, and some of which are unacceptably vague or indeed blatantly untrue.
I am referring specifically to the following sentences in the second paragraph, which cause me great concern.
1) "As we all know our retirement fund was by far not the best of funds";
2) "At first it was kept a secret from the faculty";
3) "When its innards were finally disclosed to the faculty, it turned out that it had been losing money hand over fist";
4) "Moreover, in the early seventies, then under Canada Trust management, the fund lost, I was told, many millions of our money in one year".
I wish only to make the following statements about the pension plan as it is at present.
1) It is one of the best pension plans in force. Not only does a retiree receive a defined benefit (based on length of service and level of salary) as a minimum guarantee, but, in addition, he or she is eligible to share in the earnings of the Plan when his/her Money Purchase component exceeds the Minimum Guarantee. Many plans provide ONLY a similarly-calculated minimum-guarantee benefit.
2) Information concerning the Plan is immediately available upon request, from the Office of Human Resources at the University. No attempt is (or has ever been) made to hide information regarding the Plan from members of the Plan.
3) The performance and management of the fund are monitored closely, and changes in investment companies are made when deemed necessary. At present, the investing companies are "Gryphon" and "Sceptre". The rates of return for the years 1985 to 1993, as of June 30th of the years in question, are: (The rates in row 2 are percentages).
One must realize that the purpose of the Plan is to provide the retiree with at the least a defined minimum guaranteed income, with a reasonable possibility that, during many years, his income may exceed the guaranteed minimum.
If the retiree is not satisfied with that, but wants something more, by all means let him do as Dr. Cervin suggests, namely save extra money during his working life and invest it himself or herself. The person may, as Val says he himself has done, do very well in his investments; or he may do poorly. There is no guarentee of success.
In spite of my words of criticism, I realize that more information regarding the performance of the fund ought to be provided to the retirees on a regular automatic basis. Those of us involved in the monitoring of the Plan shall make it a point to see that this is done. NORM SHKLOV
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