By John Holmes Chair, QUFA Working Group on Pensions
The meltdown and turmoil in financial markets has many people concerned about their retirement savings, including their pension plan. Within the next few days, members of the Queen’s Pension Plan will receive their annual statement showing the balance in their money purchase pension account as of 31 August 2008. The return for the Plan year ending 31 August 2008 was -4.37%. In September, the Plan lost -9.42% and, although not officially announced yet, it probably lost a further similar amount in October. Although at the moment there is great uncertainty with regard to when markets may start to recover, it is worth remembering that there have been times in the past (e.g., 1987-1988) when the Plan was down significantly early in the Plan Year but recovered to close out the year with only a very modest loss. At the request of the employee groups, the University Pension Office will shortly circulate a statement aimed especially at those who may be considering retirement in the next few years, explaining the implications of the current situation.
In the context of the current financial difficulties facing Queen’s, you may have heard the Principal and other senior Administrators making reference to the pension plan as a factor contributing to need for the impending budget cuts. It is true that currently the University is legally required to make annual special payments of approximately $4 million into the Plan in order to begin to pay down the unfunded liability of $40.5 million that existed when the most recent official valuation of the Plan was filed in February 2007. However, and although on paper the unfunded liability will have increased significantly in recent months due to the equity market downturn, the University will not see any change in the current level of expenditures going to the pension plan until it is required to file the next official Plan valuation in February 2010.
The campus employee groups (QUFA, CUPE, and QUSA) continue to meet with the University Administration to discuss issues relating to the Queen’s Pension Plan. Although slow, progress is being made towards an agreed-upon set of changes to the provisions of the Plan. We also continue to monitor closely attempts by the Board of Trustees to revise the governance structure of the Plan. The next meeting with the Administration on Pension issues is scheduled for mid-December, and I will report more fully on the state of these negotiations in the next issue of QUFA Voices. Members are reminded that the Annual Meeting of the Pension Plan is scheduled for 5 December 2008 at 1.30 p.m. in Dunning Auditorium.
John Holmes can be reached at email@example.com.