Budget to benefit university

Pension solvency deficit may be absolved with joint plan

The University could save $292 million worth of solvency payments as a result of the budget.
The University could save $292 million worth of solvency payments as a result of the budget.

The University stands to benefit from the provincial budget passed by the Ontario legislature on July 24 — the same budget that triggered the June election.

Caroline Davis, vice-principal of finance and administration, told the Journal via email that several aspects of the budget will affect Queen’s and other post-secondary institutions.

Among these are deferred maintenance funding, support for research infrastructure and a framework allowing pension plans to take advantage of a pension solvency exemption through a Jointly Sponsored Pension Plan (JSPP) — absolving the University of having to pay $22 million in special solvency payments beginning in 2015.

The JSPP’s permanent solvency exemption and funding for the Ontario Research Fund will impact Queen’s the most, Davis added.

The option to transfer to a JSPP comes as the Queen’s Pension Plan (QPP) faces $292 million in solvency deficits with a 10-year payment period under temporary solvency relief measures, the Journal reported last month.

The pension provisions in the budget would allow the QPP to switch from a single-employer pension plan to a JSPP, availing the University of the JSPP’s permanent solvency exemption.

“This could potentially be important to Queen’s, as it is one of the options we are considering to address the solvency deficit within the QPP,” Davis said.

The budget also calls for a three-year, $250 million contribution toward the Ontario Research Fund which, Davis said, “will leverage federal government and private sector support for research infrastructure.”

She added that Queen’s receives roughly $1 million annually from the province to address the University’s $243 million deferred maintenance backlog. While the 2014 budget includes a 10-year $500 million investment for deferred maintenance funding across the post-secondary sector, the additional funding Queen’s will receive is currently unknown.

However, the University expects to spend $5.9 million in 2014-2015 on the “highest priority items” in deferred maintenance, Davis added.

December panels on the Campus Master Plan stated that four buildings are in critical condition — Jeffery Hall, Kathleen Ryan Hall, Harrison-LeCaine Hall and MacGillivray-Brown Hall.

AMS Academic Affairs Commissioner Colin Zarzour said that the 2014 provincial budget is “not the worst budget” for post-secondary education and Queen’s.

However, he noted an absence of a large focus on post-secondary education in the budget.

“We look at the provincial budget which is supposed to be supporting the system and then post-secondary education is hardly in there,” he said.

Deferred maintenance is a problem that affects students daily through wear and tear of campus buildings, the safety of buildings and how advanced or not advanced classrooms are, Zarzour added.

“Basically, the $500 million towards deferred maintenance that the Liberals set out doesn’t even cover U of T’s costs of deferred maintenance, let alone all the universities.”

“It’s good, I guess, that we’re seeing money being allocated towards that, but the worrying part is that the money does not at all reflect the gravity of the problem,” he said, adding that most Ontarians consider post-secondary education as a necessity.

“It’s not simply students being like ‘we want more in the budget’, it’s Ontario saying we need more in the budget.”

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