Universities Granted Temporary Pension Funding Relief
August 05, 2010 - Campus Bulletin
Ontario's universities have been granted a temporary, conditional reprieve from making significant pension payments required under current legislation.
"I am pleased with the announcement, but there are many details and conditions yet to be worked out and confirmed," says president Alastair Summerlee. "We will continue to keep members of the community informed as these details emerge."
Currently, the province requires that every three years, businesses with defined-benefit plans, including universities, “prove” they have the financial means to meet current pension requirements if they were to close.
For U of G, meeting this requirement would have increased its pension plan contributions from $20 million to between $70 million and $100 million per year.
“It would have seriously impaired our ability to deliver quality educational programs, meet enrolment targets and maintain short-term fiscal stability,” says Summerlee.
“At this stage, I am delighted that the government has clarified its commitments outlined in the spring provincial budget in support of institutions as they restructure pension plans in both the medium and long term to make them more affordable.”
It's important to note, however, that the relief is temporary, he adds. “Our structural challenges remain unchanged. We will have to continue with our multi-year budget plan and preserve the contingency fund set up to assist with pension deficit payments in order to ensure the continued fiscal stability of the University.”
Today’s decision essentially gives U of G time to identify and solidify options to improve the long-term viability of the pension plans, says Summerlee. Guelph will continue working with employee groups to make the necessary changes, he says.
“I know this matter has been a considerable concern to faculty, staff, students, alumni and members of the Board of Governors. I would like to thank everyone for their patience, in particular those who have helped with the advocacy effort.”
He also acknowledges the dedication, support and commitment of staff from the Ministry of Finance; the Ministry of Training, Colleges and Universities; and the Council of Ontario Universities.
More information is available on the government’s website.
