Letter addresses to Doctor Alan Rock, President and Vice Chancellor of the University of Ottawa,
To Sir/Madam Administrator of the University and of the Retirement Pension Plan
550 Cumberland Street, Ottawa, Ontario K1N 6N5
Ottawa, November 5 2013
:
To Doctor Alan Rock, President and Vice Chancellor of the University of Ottawa,
To Sir/Madam Administrator of the University and of the Retirement Pension Plan
550 Cumberland Street,
Ottawa, OntarioK1N 6N5
Subject:
Resolution of the APRUO, May 29 2013 and letter from the APRUO, October 16 2013
Mr President, Sir/Madam,
Herewith a few comments concerning the documents mentioned below:
Resolution of the APRUO, May 29 2013 demanding justice and equity for the oldest retirees.
This text was sent 15 days prior to the Annual General Meeting to more than 600 persons of which 428 had paid their membership. Copies were available at the meeting. The resolution was adopted unanimously by the 55 persons present in the room with one abstention.
Letter addressed to the retirees, spouses, deffereds and interested, October 16 2013 .
The Association oversees and defends the interests of retired professors and all persons who have the right to the sums claimed in the resolution of May 29 2013.
In 2007, Buckconsultants actuaries were replaced by the actuaries of Mercer. The latter prepared a Powerpoint report dated June 11 2007. On page 32, one sees that the pension fund is, as the expression goes, full of money. The University will not be able to contribute to the fund. Herewith the text: «As a result, The University cannot contribute to the plan until the going-concern excess has been reduced by 25.6M». In a few words, the surplus is so high that fiscal policy forbids the University from paying the amount foreseen previously.
Why was the 3rd payment not made ? ? ?
In preparing the report for deposit in Toronto, the actuaries discovered an error and communicated it to the University in July 2007:the University can make its contribution for year 2007 or it can not make it and take a contribution holiday.Afresh, no one raises the possibility of making the 3rd payment. The University profits from the situation, takes a contribution holiday and grants a contribution holiday to the employees, forgetting the retirees, who, as of 31/12/2006, have the right to about 40% of the pension fund (Mercer report, July 2007, page 6).
Respectfully yours,
Viateur Bergeron, President of the APRUO and member of the Pension Committee.
Enc. Resolution of the APRUO, May 29 2013 and letter from the APRUO, October 16 2013, web site of the APRUO for interested persons that we cannot reach by post or email.
Resolution of the APRUO of May 29, 2013
claiming justice and equityfor the oldest retirees
Persons who were already retired in 1998 are old retirees. This is the same for employees who retired in 2007. They receive the smallest of pensions in comparison to the pensions received by recent retirees, of year 2012 for example. The criteria for calculating pensions have changed and the salaries used to calculate the amount of pension are much higher than those of previous years, such as for 2002. To grasp the differences between pensions on the basis of years of service and sex, one can examine the following data concerning the average of pensions in 2002 and 2012 (Source, report of the actuaries).
In 2002, the average pension for men was $29,800, that for women was $10,900 and the average for all pensioners was $21,600.
In 2012, the average pension for men was $39,600, that for women was $20,800 and the average for all pensioners was $30,200.
When a person retires the amount of annual pension is fixed for life. In principle, the amount will increase only by the annual increase originating from indexation.
Following the Reform of our Pension Plan the sums transferred to all the beneficiaries were deposited into their bank accounts or as investments in their RRSPs or their RRIFs. It will be the same for the transfer of the sums that we claim for the retirees, the employees targeted to receive the 3rd payment, those with deferred pensions and their heirs. These sums paid to the oldest retirees will allow them to confront the costs of living and especially the additional expenses brought on by aging.
The costs of health services and medications are not related to the revenues, the employment or the social standing of the retiree. Many older retirees are often unable to pay these expenses. Many of them have no health benefit from the University. That is the case for those who retired before May 1st 2001. Those who retired after this date have health benefits depending on whether they were academic or support staff and the date when they retired.
It is in order for us to claim all that is due to the persons that we defend and for whom we maintain the claims made since several years and which are spelled out clearly in the resolution of May 23 2012. We repeat the principal elements.
We claim, in dollars, the sum of 48300000.
For the retirees, 22400000 (15400000 for the 3rd payment + 7000000 in compensation for the contribution holiday granted to the employees in 2007).
For the employees, 23900000, that is the sum due to the employees as part of the 3rd payment.
For the deferreds, 2 000 000, (for their part of the 3rd payment, 1500000 and for their part in compensation for the contribution holiday granted to employees in 2007, 500 000).
These claims were established on the basis of numbers and data of year 2011. These amounts will have to be revised for each group using numbers and data from the year the payments are made.
We ask that the total amount of $ 48300000 be declared, as of the date of the 1st of January 2011, a priority debt and obligation which should be paid in total as soon as there is a surplus or in several tranches as soon as there are successive surpluses as long as is necessary to pay to each person alluded to the total amount that is due to him or her. The Association of Professors Retired from the University of Ottawa requests that the fiduciaries act according to the fundamental principles of justice and equity and that they follow up on our request. That they establish the sums that should be given to each retiree, employee, heir and member with a deferred pension.
IN CONSEQUENCE it is proposed by Bernard Philogène and seconded by John Trent
That the present resolution be adopted and that it be brought to the attention of the fiduciaries (the members of the Board of Governors), the actuaries, the auditors of the Pension Plan and the members of the Pension Plan Committee of the University of Ottawa and the representatives of the retirees and the employees. That the resolution be published on the web sites of the APRUO and the APSR/SSRA.
That this resolution be considered a public document that can be published without change and with mention of its source.
Approved with one abstention.
Ottawa, May 29 2013
Viateur Bergeron, professor retired on June 30 1996
President of the Association of Professors Retired from the University of Ottawa (APRUO)
Original text in French by Viateur Bergeron, May 29, 2013
English translation by Léo Benoiton, May 29, 2013
LETTER ADRESSED TO RETIREES, SURVIVING SPOUSES, DEFERRED MEMBERS AND INTERESTED PERSONS
Ottawa, October 16 2013
Dear Colleague
The Association oversees and defends the interests of retired professors and all others who have the right to the sums claimed in the resolution of May 29 2013. This resolution was sent to you on May 14 with the invitation to attend the Annual General Meeting to be held on May 29 2013. You can consult this resolution on our web site. It was unanimously adopted but with one abstention.
We contend that our requests are always well founded, because the administrators of the Pension Plan did not honour the resolution adopted on July 24 2000, in particular the section that follows.
EXTRACT FROM THE MINUTES OF THE BOARD OF GOVERNORS
MEETING OF JULY 24 2000
The estimated cash allocation to members is distributed as follows: $34.8million to active members, $34.3 million to retirees and $2.2 million to deferred members. The cash allocations are to be paid out only if a full reserve of 6% remains after the pay-out, otherwise the allocation will be pro-rated to insure that this 6% reserve is maintained. The cash allocations to members are to be paid out in three equal installments, one in 1999, one in 2002 and the last one in 2004. In the event that insufficient funding is in the plan to allow for the cash allocation and the retention of a 6% full reserve, the situation will be reviewed in 2005 and 2006 to ascertain if the balance can be paid while retaining the necessary reserve. No payment will be made beyond 2006.
Viateur Bergeron presented to the members of the Administrative Committee of the APRUO a memo that Louise Pagé-Valin, then Director of Human Resources, had addressed to the members of the Retirement Pension Plan of the University of Ottawa, on July 26 2000. This memo reveals the decision of the Board of Governors of the University (supra). Herewith the extract from the memo : The reserve exceeding 6%, the first installment will be distributed when the necessary approvals have been obtained. If the reserve is maintained at least at 6%, a second payment will be effected in 2002 and a final one in 2004. If the surplus is insufficient for a complete payment at one of these dates, a proportional distribution will be effected. If the sums available in 2004 remain insufficient to effect a complete payment, a new assessment of the situation will be made in 2005 and in 2006 to see if the sums could be distributed at this date. If in 2006 the surplus increases sufficiently, the final payment will be made, in total if the surplus permits it or proportionally if it doesnt.
The first payment (September 1st 2000) and the second payment (January 1st 2002) were made together in 2003. Following this, all seems to have been done by the Administration as if the rules contained in the pre-cited documents (supra) did not exist for the 3rd payment. Confusion was created by the following facts. The actuaries Buckconsultants presented a report by PowerPoint on the data of year 2005 (as the usual Actuarial Valuation as at January 1, 2006). They did not produce a signed report nor send one to the Commission in Toronto. They did not observe the new rules for actuaries that came into effect on the 1st of February 2005.
In 2007, the actuaries of Mercer took up the duties. In their PowerPoint report dated June 11 2007, page 32, the pension fund is, as the popular expression goes, full of money to the point that the University was not permitted to make its usual contribution to the Plan. Herewith the English text : As a result, The University cannot contribute to the plan until the going-concern excess has been reduced by 25.6M. One must understand that the actuarial valuation concerned the values that existed on January 1st 2007 and which were the same values as on December 31 2006 and probably several months before, during the course of year 2006. All evaluations presented to the Pension Plan Committee on June 11 2007 concerned the data, the decisions and the revenue and expenditures for year 2006.
In preparing the report for deposit to Toronto, the actuaries discovered an error which they communicated to the University in mid July 2007. The University can make its contribution to the plan for 2007, or not make it by taking a contribution holiday. No one dwells on the possibility of making the 3rdpayment.The University takes advantage of the situation to take a contribution holiday and grants a contribution holiday to the employees, forgetting the retirees. In 2006, the sums available were more than sufficient to make the 3rd payment. The administrators of the pension fund were obligated to respect the obligation which they themselves had created in adopting the resolution adopted on July 24 2000. The omission of the retirees is a very serious error and it must be corrected. This is the request that we have made since several years and we are right to continue until the day that justice is served. If the administrators of our pension fund possess a normal sense of justice and equity and considering the improved value of our pension fund, the administrators should pay what is owed to the persons specified in our resolution of May 29 2013.
On October 2 2013, Le Devoir, as well as The Citizen, published a text from the Canadian Press entitled: The health of pension plans is improving. I cite for you the following paragraph: The consulting firm Mercer indicated on Tuesday that their index on the health of pension plans has reached 98% on September 30, its highest level since July 2007. The index which examines the status of a hypothetical pension fund was at 94% in June and at 82% at the beginning of the year.
The value of our pension plan has improved greatly. Herewith numbers based on market value. On the 1st of January 2011, the value of our pension fund was $1,304,697,000. On June 30 2013, the value of our fund was $1,552,000,000, an increase of more than $247 million over a period of 30 months.
That is why I have confidence in our initiatives to claim what is due to us since several years. In order to succeed the members of the APRUO must support the claims that the members of the Administrative Committee have prepared and have sent to the administrators of our pension fund. We are telling them that recognition of their error(s) will demonstrate their honesty and their sense of justice and equity towards the persons who work or have worked to build and keep the value of the University of Ottawa.
We depend on your membership for the year 2013-2014. We invite you to view our web site at: There you will find useful information as well as the resolution of May 29 2013.
The President, in the name of the Administrative Committee,
Viateur Bergeron