Queen’s employees face financial hurdles

Government plans will aid pension solvency in Ontario universities but want two years of wage freezes

Caroline Davis (left) and Bob Silverman (right) say that talks with campus unions may play a role in Queen’s students education.
Caroline Davis (left) and Bob Silverman (right) say that talks with campus unions may play a role in Queen’s students education.

If pensions continue to increase at the current rate, the fund could cost the University’s operating budget $38 million by the 2012-2013 school year.

Given the University’s entire operating budget comes in annually around $400 million, this is fairly substantial, said Provost and Vice-Principal (Academic) Bob Silverman.

“The good news is that Queen’s retirees are living longer,” Silverman said. “But this has put a strain on the pension plans.”

Queen’s isn’t the only public institution to be met with this problem. The provincial government has responded with a new plan for pension solvency. Rather than mandate universities continue their pension contributions, they are allowing them three years to think about their future and decide on a sustainable plan.

“They’ve given us more time to develop a plan to solve the problem and come up with the needed funds,” Silverman said.

As noted in the Sept. 27 financial update, this could likely mean an increase in employee contributions to their pension or a change in pension benefits.

Caroline Davis, vice-principal (finance and administration) said the next pension evaluation is August 2011. By that point the University should have a firmer idea of how they want to handle the situation.

“The government is looking for some degree of risk sharing between universities and employees,” Davis said.

The government also wants to see across the board wage freezes for all public sector employees for a period of two years. For Faculty members, salary is divided into two components: across the board, and merit. Silverman said merit raises based on performance are acceptable but the government is aiming to freeze across the board raises, even when based on consumer price index.

Davis said that the government is still respecting collective bargaining, but wants to control salaries in the public sector in general. Any contract that currently exists is going to be fulfilled, but once the contract expires, the government won’t be giving employers any money for salary increases.

“We will be starting to discuss with employee groups how we can manage this,” Davis said, adding that Queen’s has to wait until the government has thought in detail about what their plan will be before making any firm decisions.

“We’re hoping a draft will come out this fall,” she said.

The effect on employees is unclear at the moment, Silverman said. It depends on what possible solution Queen’s comes up with, and what employee groups will agree to.

Ontario unions, employers, and the provincial government had a discussion about the wage freezes in August, and nothing came of it, Silverman said.

He said the unions have thus far refused a pay freeze but the government is persisting.

“We will negotiate in good faith. Negotiations [with the Faculty Association] will probably start in January,” Silverman said. Though negotiations will have clear ramifications for Queen’s employees, Davis and Silverman said there hasn’t been much of a reaction to the update yet.

“It is our goal to get as many people as possible to read [the update] and understand it,” Silverman said, adding that though the results may not be direct, [the] university’s talks with campus unions could play a larger role in student’s education.

“If there is more money in the system, that money goes to the students, meaning more money to hire TA’s, support research, and so on,” Silverman said.

The next financial update will be on the financial results for the 2009-2010 year. It will be available later this month.

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