U of S : Communications : OCN : Oct 3, 1997

Last week, Dr. Tony Whitworth, vice-president (finance & administration), updated the Board of Governors concerning the state of negotiations on the Academic Pension Plan (APP).

The valuation report to December 1996 identified an actuarial surplus of $33,000,000 on a fund with assets of $580 million.

The Faculty Association has proposed that the current APP be split so that only active USFA members would be in one pension plan, other active members (e.g. ASPA) in a second, and the retirees in a third one.

Once the new plans are in place, the next steps would be to provide a money purchase option. This proposal has caused nervousness with non-USFA members and retirees.

Whitworth noted that the original time lines for these changes may have to be delayed a year since, for the change to be effective January 1, 1997, negotiations must be concluded in sufficient time to notify Revenue Canada prior to December 31, 1997.

In the briefing document, he set out the actuarial and legal issues to be addressed.

Issues of concern center on:

• Who will be allowed to join the new defined benefit plan - only USFA members or all active members?

• How will current defined benefit retirees be treated?

• How will the liabilities for transfer be determined?

• How will the surplus be allocated?

• How will current retirees be protected against future inflation?

• Will membership in a future money purchase plan be optional or mandatory?

• Will future new employees have a choice?

• How will current members be informed about their options?

• What are the tax implications of the various options?

Whitworth says all these issues are being discussed between all participant groups in the Plan and the superintendent of pensions.

He says he's hopeful that stakeholder differences can be amicably resolved within weeks.

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