Ensuring the future of Queen’s pensions
Three top Queen’s administrators are evaluating the current financial state of the highly respected Queen’s Pension Plan and will bring that updated analysis back to the pension reform discussion table.
Provost and V-P (Academic) Bob Silverman, V-P (Finance and Administration) Caroline Davis and V-P (Human Resources) Rod Morrison will assess where the fund stands and what needs to be done to ensure the Plan remains financially sound and competitive.
“We are all aware of the significant impact the economic downturn has had on investments, worldwide,” said Ms Davis. “We do not, as yet, have a complete picture of what it all means from a budgetary perspective. If we do not make changes, however, keeping the plan on solid footing and in compliance with current pension regulations could take a significant bite out of our operating budget for the next few years.”
Pension plans are required, by law, to ensure the gap between available funds and expected payouts to members does not grow too large. When it does – during economic downturns, for example – employers are required to bridge that gap and keep the fund topped up. That can be easier said than done when investments take a significant tumble.
“It’s a challenge, but we’re all committed to ensuring the future of the Queen’s Pension Plan,” said Mr. Morrison. “Representatives of our employee groups and the administration have been working well together on this issue and we want to make sure those discussions remain grounded in the best and most up-to-date information.”
The size of the gap the last time the plan was evaluated, in August 2008 (prior to the market meltdown), was $45M. “Since the market decline, we know the unfunded liability has increased significantly and, with it, the mandatory contributions required to cover the difference,” said Ms. Davis.
The university has been required, by law, to use $6M per year from the operating budget to cover the difference. The next valuation date is set for August 2011, when the university will be required to adjust its payments to address the growing gap.