Retirees' Newsletter
Faculty and Librarian Retirees' Association, University of Windsor

Issue #14 -- October, 1995

PENSION UPDATE

by Norm Shklov

THE FIGURES ARE OUT for the fiscal year July 1, 1994, to June 30, 1995, and the news is great, especially for those whose pensions have reached the Money Purchase level. The increase for people whose pensions are on the Minimum Guarantee level is more modest.

THE INCREASE in the Money Purchase Pensions was 7.25 per cent, which was, perhaps, unexpected, but most welcome. We say "unexpected" because one of the two investing companies was a replacement for a previous company. It was not contemplated that such a good result would occur this early.

For those still receiving a Minimum Guaranteed Pension, the increase was 1.09 per cent. This was the percentage increase in Consumer Price Index from July 1, 1994 to June 30, 1995.

TO HELP YOU INTERPRET YOUR RECENT LETTER from the Pension Administration regarding these changes, we offer these suggestions:

1) Starting from the left of the table on page 1 of the letter, look at the second and third boxes in the table. If the amount in BOX 2 is less than the amount in BOX 3, you are on Money Purchase. If the amount in BOX 2 is more than the amount in BOX 3, you are on Minimum Guarantee.

2) If you are on Money Purchase, multiply the amount in BOX 3 by 1.0725. This will give you the amount in BOX 7, the amount of your pension during 1995-1996.

3) If you are on Minimum Guarantee, multiply the amount in BOX 2 by 1.0109. This will give you the amount in BOX 6, the amount of your pension during 1995-96.

THE FACT THAT THOSE ON MINIMUM GUARANTEE get a considerably smaller increase than those on Money Purchase is, naturally, a source of concern for those people on Minimum Guarantee. This begs from the people on Minimum Guarantee the questIon, "How long will it be before I get on Money Purchase?"

A subsequent issue of The Newsletter will carry an article showing how you may estimate this length of time on the basis of estimated average rates of increase over a period of years, first in the fund earnings, and second in the index of consumer prices.

Also, some of our members may feel they are a bit rusty on what is the difference between the minimum guarantee and the money purchase pensions and how these are calculated for individuals under the plan. A clear and simplified explanation of this is available in the Retirees' Handbook, which the Association prepared. We'll have copies available at the October meeting. You can get one there, or write and we'll send you one.

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