WLU receives pension relief
For the past few years, one of the major concerns for Wilfrid Laurier University’s budget and staff was the ailing pension plan and its growing deficit. But on June 2, Laurier gained approval from the Ontario government to receive stage-one of the temporary pension funding relief.
“It buys us time,” explained Jim Butler, VP: finance and administration. “We now don’t have to file the 2010 valuation which if we had to file that, it would take the actuarial estimate to about $67 million on a growing concern deficiency.”
The solvency pension relief program from the government has exempted Laurier from making any special solvency payments for three years from Dec. 31 2009. This coming year, the special payments to the plan have reached an amount of $6.4 million.
“So it’s about $6.4 million overall and this is an ongoing issue for the university,” continued Butler.
“We’re going to have come up with a solution to the potential plan that frees up those funds that could go into faculty hiring, class sizes, capital, there’s a hundred different uses that we could make for that amount of money.”
Budget cuts of 0.8 per cent and 0.6 per cent will be made to the 2012-13 and 2013-14 academic years to help aid the payments for the pension plan, but it has not been determined where those cuts will occur.
Butler also noted that the plan is currently only 80 per cent funded and hopes to make it to the 100 per cent mark.
With this solvency relief plan, the university does not have to file for evaluation until December of 2012. During those three years, since the first actuarial evaluation in 2009, the university has the opportunity to review their pension plan with its employees to come up with a more sustainable plan.
To receive stage-two relief, the university will have to demonstrate that substantial progress has been made towards their proposed sustainability plan.
“Government will review it and if it’s acceptable then we’re fine, if it’s not fine then we revert back to the existing pension benefits act regulation, which means we’d have to file every year and start making increased contributions to the pension plan,” said Butler.
“Which again takes money away from other uses.”
—With files from Justin Fauteux and
Linda Givetash