The Ontario government requires that every pension plan in Ontario regularly assess whether a plan would have enough money to pay for the benefits promised to plan members, should a plan have to wrap up operations immediately.
At the height of the financial crisis, the Ontario government gave the Council of Ontario Universities a grant to study whether Ontario universities would meet this solvency test. Bearing in mind that all financial products were affected by the crisis, how did university pension plans do?
At the trough of the financial crisis, only half the pension plans studied would have required extra money to meet the solvency test. The size of the extra payments ranged from .6 per cent to 10 per cent of the total salaries paid to members of the plans.
Indeed, across the entire university system, the special payments would have required less than one per cent of additional university operating revenue annually to cover special pension payments.
Moreover, many of these plans are on better financial footing now than when the study was completed.
While OCUFA and its member faculty associations will continue to be diligent in ensuring faculty plans are properly funded, there is no evidence of a solvency crisis in the system.