Do you know what Ontario’s teachers, municipal employees, and hospital workers take for granted that University employees are missing? It’s a multi-employer jointly sponsored pension plan (JSPP). Public sector workers in the aforementioned areas are members of the Ontario Teachers’ Pension Plan (OTPP), OMERS, and HOOP respectively.
The University sector is moving in this direction via a ‘University Pension Project’ led by the Council of Ontario Universities and the Ontario Confederation of University Faculty Associations (OCUFA). The goal of the Project is to create a framework for a multi-employer jointly sponsored pension plan which existing single-employer University sector plans may join.
A growing number of Ontario Universities (latest count = 10) are participating in the discussions. The project is being encouraged (and funded) by the Ontario government, and both labour and employer pension expertise has been retained. Guelph participation includes the Faculty Association (UGFA), other bargaining groups and senior administrators.
The primary motivation for pursuing a JSPP is potential “solvency relief”. Guelph’s pension plans (and most of our fellow institutions) have much higher solvency deficits compared to ‘going concern’ funding requirements. Unfortunately the province is forcing employers with single-employer plans to aggressively address their pension deficits using the more onerous solvency (wind-up) calculation.
Addressing the solvency deficit would require Guelph to contribute an additional several tens of millions of dollars a year – a figure that would impose a very heavy burden on the university budget. The primary benefit of joining a multi-employer JSPP is that this would not be a short-term requirement.
There are additional benefits and risks associated with the potential transition from single-employer plans to a multi-employer JSPP, but a full discussion is beyond the scope of this update.
The four-phase Pension Project (i.e. research, design, build, transition) has deliverables including the following:
- A consent mechanism that meets government requirements
- A communications/engagement plan
- An implementation plan
The Pension Project web-site, being maintained by OCUFA will have the most current information as the project progresses. Once a consensus design framework for the new pension plan is achieved, each University will determine whether they will proceed to the next phase. Stay tuned for further news.N.B. It is important to note that pension benefits already earned and pensions currently being paid are guaranteed under law never to be reduced, thus our current pensions would not be affected.