A disturbing trend is showing up at faculty bargaining tables across the province with more and more university administrations demanding pension concessions. They claim that pension plans are “underfunded,” and so pension plan members must increase their contributions, accept reduced pensions, or do both.
The trouble with these demands is that university administrators are blowing the difficulties faced by some university pension plans way out of proportion.
Take Queen’s University, for example. The Queen’s University Faculty Association is now at the bargaining table, and last week the employer tabled a demand for pension plan restructuring.
But here’s the thing: the Queen’s pension plan would likely not qualify for solvency relief under Ontario’s new pension regulations. And Queen’s is not alone. Faculty pension plans at the University of Windsor and elsewhere are in the same condition.
What’s going on here?
The real issue here is not the state of pension funds. The real issue is chronic government underfunding of the university sector. University administrators, lacking funding increases that keep pace with rising enrolments, look to the expense side of the balance sheet to reduce costs. And that’s how pension plans become targets.
OCUFA has been urging the government to increase its funding to universities, with some success, most notably Ontario’s 2005 Reaching Higher program. But that was more than six years ago, and enrolments are skyrocketing (with the government acting as an energetic recruiter, especially at the graduate level). OCUFA estimates that more than a billion dollars of additional funding is needed annually simply to return to the state of affairs 10 years ago, let alone 20 or 30 years ago.
Ontario faculty have demonstrated many times over the years that when there is areal problem with a pension plan’s finances, they are perfectly willing to accept their fair share of the responsibility entailed in closing a funding gap. But to be asked to contribute more and receive less in order to make up for the government’s failure to fund universities adequately is unacceptable.
Moreover, the government’s new regulations (177/11 and 178/11) dealing with Ontario university pension shortfalls is producing, as OCUFA predicted, a turbulent labour relations environment, with university administrators exploiting this overblown pension “crisis” to go after employee pension plans.