Pension Message from University Administration

We hope all of you are well and managing in these unprecedented times.

We haven’t been in touch for a while and thought a short note should be sent to confirm that, regardless of the COVID 19 impact on financial markets and the economy, the University of Guelph pension plans are financially strong enough to weather the present uncertainty. Members should not be concerned about their pension and retiree benefits.

The University of Guelph continues to partner with the University of Toronto and Queens University to merge pension plans effective July 1, 2021. The merger will financially strengthen the pension of the three universities. Again, as has been stated previously, it’s important to emphasize that the merger will not have any impact on existing pensions. There is a University Pension Plan website which provides more details…https://www.universitypension.ca/ [1] 

Everyone stay healthy and we’ll all get through this crisis together.    

Martha Harley

Don O’Leary

Pension Information from UGRA

Summary Highlight

The annual pension indexation calculation is based on the May-April year.  This year's average CPI increase for the 12 month period ended April 30/2020, compared to the prior year is 1.81% (calculation confirmed with Human Resources).  Therefore, there will be no pension increase for us this year.

Full Report

The new University Pension Plan (UPP), an initial partnership of UofG with the University of Toronto and Queen’s, will preserve our precious defined-benefit pension program.  The UPP was formally established January 1, 2020 with the appointment of a fourteen-member Board of Trustees.  Ms. Gale Rubenstein was appointed inaugural chair of the Board by the UPP Joint Sponsors. 
Current employees of all three universities will begin earning credited service under the UPP from July 1, 2021.  Current retiree pensions are unaffected by the UPP conversion, although payments may come from a different disbursing agent. 
Our current UofG pension plans, at their fiscal year ending September 30, 2019 had combined assets of $1.61 billion.  The investment return for the year was 4.5%.  Disbursements to current retirees totaled $78.8 million.  Retirees (and survivors) make up almost 40% of total membership in Guelph’s three plans. 
During the past six months, the Board of Governors’ Pension Committee completed an actuarial valuation (I.e. the ‘liability view’) of the two major plans (professional and retirement) as of October 1, 2019.  The valuation indicated a going-concern deficit for the combined plans of $97.8 million and a funded ratio of approximately 94%.  The solvency calculation (wind-up less indexation) indicated a combined deficit of $416 million, and a funded ratio of 79%.  This latter calculation will likely not be required when the UofG plans move to the new UPP. 
Additional actuarial valuations will be completed in the coming year, effective October 1, 2020 and again at the ‘conversion date’ tentatively June 30, 2021.  The University will be responsible for addressing any funding deficit as part of the UPP transition. 
Moving toward the new jointly sponsored UPP pension plan has been an arduous process.  In the turbulent environment we are experiencing currently, I would not be surprised if there were a few new challenges to address before the migration is completed.

David Douglas Badger, CPA CGA (retired)