The Retirees' Newsletter

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

Vol VIII, No. 4, October 1998


Association News

Statement of Stan Cunningham - Member, Retirees' Association - Orally presented to the Faculty Association Contract Information Meeting - September 17, 1998

The proposed contract fails to protect retirees, especially those on the minimum guarantee (MG), by failing to secure their just due. The most acute of these injustices has to do with the proposed distribution of the plan's excess surplus--that portion of the plan's general surplus that must (by law) be distributed or spent. The excess surplus is $22.6 million. The largest portion of that surplus (42.4%) returns to the University The next largest slice, $7, 360, 000 or 32.5% will be distributed to the active (mostly teaching) members through a pension-payment holiday of 3˝ years. A tawdry 4.42% goes to minimum-guarantee retirees who retired before Sept. 1 of 1997. This strikes us as a violation of distributive justice for a number of reasons.

1. The same kind of distribution was also negotiated in the last contract for the last two years. This new contract proposes to continue the pension payment-holiday mode of distribution for another 3˝ years, well past the life of the contract..

This means that by February 28, 2002, anyone who hired on within the 5˝-year period (Sept. 1, 1996 to March 31, 2002) will not have paid anything--out of earned salary--into the pension plan, but will later reap pension benefits (including the University's contributed portion) just as if they had paid all along. At the same time, however, there are dozens of MG pensioners who, after 25 to over 40 years of subscribing to the plan, have been receiving little or no increase (0 to about 2% under terms of the last contract). When annual increases, through indexing, are so little, this class of retirees continues to slip behind the cumulative cost-of-living increase, and continues to recede further from the healthier rate of increase in the money-purchase (MP) portion of the plan.

The 4.42% currently proposed for MG retirees corrects only some of that slippage, for a few of the MG retirees by bringing them up now to full CPI indexing. Even at that, it does not compensate retroactively for the thousands lost to them over the years. And it only applies to some retirees, those who retired in the early 1980s. The Agreement summary, then is misleading when it claims to increase MG benefits "of all retirees to the level they would have received…" (p. 2, bottom).

2. Historically, University of Windsor MG pensioners have not fared well. Currently, more than one-third of our retirees are on MG. Unlike the money-purchase (MP) pensioners who receive healthier rates of increase (15-year average: over 5%), especially during bull-markets runs, the minimum guarantee itself (with a 15-year growth average under 2%) has fallen behind the cost of living by 35% in the last 15 years. Given that scenario, it becomes hard, unlikely for some, to climb up and on to the kinder MP platform. Indeed, under the proposed contract, the minimum guarantee will continue to fall behind CPI increases by 25% over roughly the same period. Once again, the proposed 4.42 for some MG retirees is as grossly inadequate as it is unfair. In effect, it reinforces a system of double-class citizenship among retirees.

3. Since the excess surplus is generated within the MG portion only, why is it being distributed so disproportionately. Consider what the excess surplus is and its purpose. Excess surplus is money, contributed by the University to top up pensions to the minimum-guarantee level, which is left over after all minimum guarantees (under an inadequate indexing system) have been met. Its purpose, that is, lies most closely to MG recipients to which it was originally dedicated Why then should 75% of it be distributed as a pension holiday and payment holiday to the University and its active members without a fair proportion also being distributed to MG participants who paid their dues without any pension holidays, but who are slipping behind.

Bottom line: the proposed distribution of excess surplus means that, even after two years of pension holidays, MG pensioners are still not receiving their fair share and will not for at least another 3˝ years .

This Faculty Association has failed to look into and implement a number of options. Last April, two motions were passed at an open contract meeting of the Association. One of those motions proposed a formula for just distribution of the excess surplus funds. The second resolution proposed improvement in the indexing formula for retirees. There is little or no evidence that the contract or negotiating committees heeded these motions, let alone made any adjustments and improvements in their direction.

If the Association's negotiators felt constrained by indexing formulae, they might have considered the possibility of distributing excess surplus to retirees through cash bonuses (such as those made to CUPE 1001 retirees). Though permissible and legal, that's certainly not our preference, but it might have been better than the tawdry $4.42 % that some MGs wind up with in this proposal.

There is no evidence that this Association took any action to activate the proposed Retired Members' Pension Committee, proposed under Article D7 of the 1996-1998 Contract, which was supposed "to examine the adequacy of the retirement benefits provided by the University of former faculty members and librarians"; and no evidence of the "report, including recommendations" that was to have been submitted one year after the signing of the last contract. Spelled out here was an opportunity to diagnose and correct the plans failures, and you did nothing.

In sum, (I) the Association continues to practice and to tolerate injustice against its retirees by proposing an unfair distribution of excess surplus funds; (ii) the Association has been negligent and supine in failing to investigate improvements and to secure equitable pension increases for its retirees.

We will not silently endure these failures.

1. We urge Association members not to ratify this portion only of the proposed contract--the Pension contribution holiday--and to reopen negotiations with the Board.

2. We have just filed a grievance with the Faculty Association (under Article D14) against the University of Windsor. We expect that the Faculty Association will represent us in this grievance.

3. If we do not receive satisfaction, we are prepared to carry our case to the Ontario Labor Relations Board.

4. Over the next two years, the Retirees Association will submit to the Faculty Association a number of proposals designed to improve pension committee structures and policies for the sake of current and future retirees (that's you!)


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