The Retirees' Newsletter

The Retirees's Association ( Faculty, Librarian, Administrator), University of Windsor, Windsor, Ont. Canada

Vol VIII, No. 3, June 1998

SPECIAL PENSION SECTION (First in a series, to provide Clarifications to our Pension Plan)

By Pat Galasso

Over the last several months, I have been attempting to get clarification on certain technical aspects of our pension plan. I was motivated to do this: a) for general knowledge for retirees to put our minds at ease, and b) to deal with statements which I believed to be erroneous, and which have created unfounded tensions between those on the minimum guarantee and those on the money purchase.

I wrote to the University and received a reply which was somewhat general. I have written to them again and hope to receive an early response. In the interim, I have discussed the issues with experienced individuals, and I feel comfortable in making the following statement: "The 6% factor which appears to be withheld from the money purchase component of the pension is simply a factor associated with the variable annuity which generates the money purchase pension, and which is part of all of our pensions. It is a factor which has already been credited to the money purchase component. I'll explain in a subsequent article. In any case, the surplus does not emanate from this source.

The University contribution, over and above the matching contributions which are made toward our individual plans does the following:

a) boosts the individual pensions of those whose money purchase component is below the minimum guarantee both at retirement and each subsequent year as needed, and

b) generates a pension surplus when its assets exceed the liabilities.

It was reported in a recent article in the Retirees' Newsletter that those on the money purchase are subsidizing the pensions of those on the minimum guarantee. THIS IS NOT THE CASE. THE MONEY PURCHASE PART OF THE PLAN NEITHER GENERATES THE SURPLUS NOR DOES IT SUBSIDIZE THE MINIMUM GUARANTEE.

There is another fiction. Because the University has to subsidize the pensions of those on the minimum guarantee, that if it didn't have to do this, then the salaries of active faculty members could be increased. HIGHLY UNLIKELY. Active faculty member salaries are at the median in the province since the original contract back in 1976. The University is faced with non-replacements, larger classes, programs being curtailed and eliminated, research grant equipment being used in undergraduate labs, labs turning into demonstrations, library holdings decimated, etc. Need I say more?

One area where the University was forthcoming with information reflected upon our rights as members of the Pension Plan. These rights are established by the Pension Commission of Ontario. The following outlines our individual rights:

The Pension Benefits Act stipulates that the University must make available for inspection the prescribed documents and information in respect of the Plan and the Fund upon written request by either:

• a Member;
• a spouse of a Member;
• any other person entitled to pension benefits under the Plan; or
• an agent (authorized in writing) of a person mentioned in (a),(b), or (c) above.

The following items are included as information that is available upon request:

• the Plan text, and any amendments to the Plan
• copies of annual information returns,
• copies of any statement of investment policies and goals;
• actuarial reports;
• financial statements
• any other documents filed with (including correspondence) the Pension Commission of Ontario.

Page one (Issue index)Next page