October 11, 2008

The current Brandon University pension maximum is $1722 per year of service. A Full Professor (with a spouse) retiring with 25 yrs service (the average service of retiring BUFA members) would receive a maximum pension of approximately $1722 per yr x 25 yrs= $43,050 - 15% joint survivor penalty= $36,592 per annum or $704 per week (exclusive of income tax deductions). This is less than we are receiving as strike pay! In addition, it must be remembered that there is effectively little indexing to the B.U. Pension Plan.

The federal pension maximum per year of service for 2009 is $2444 per year of service. After 25 yrs service, this would yield a maximum pension of $61,111 per annum. That is what you would receive as a maximum at most other universities. If you leave B.U. and go almost anywhere else, 25 years from now when you retire, your pension would be 40% greater than what Mr. Lamont wants you to have.

Federal legislation increases the pension maximum annually by the cost of living after 2009. Assuming inflation of 3%, (actuaries usually assume 4% at this time) this means that in 10 yrs (2018) the federal maximum would be about $3285 per year of service. After 25 yrs service that would give a pension maximum of $82,125. Remember the purchasing power of that amount will have reduced by inflation.

If Mr.Lamont and Dr. Visentin get their way, the B.U. maximum will still be $1722, making a BU pension worth only 44% of what a professor with the same salary and years of service would get at virtually every other university in the country. By 2018 virtually everyone in the academic ranks (Assistant to Full Professor), as well as PA's will be affected by this pension maximum and the IA's will not be far behind.

It is BUFA's belief that the Administration's so-called 'negotiating' position, whether by design or by ignorance, dramatically undermines the pension plan. Those of you who are 10 yrs from retirement can expect to receive a pension worth less than 50% of what you would have gotten had you gone elsewhere.

If you are further from retirement, you can expect much less. The situation is particularly insidious in that if we don't do something soon, it will become impossible to ever finance improvements to the plan. The cost of raising the pension maximum to the federal maximum will be prohibitive. Since Mr. Lamont perennially sits on the Board of Pension Trustees as one of the representatives of the Board of Governors, BUFA believes that he knows this. The problem has been brought up numerous times by the BUFA representatives on the committee. BUFA assumes that his ultimate objective may be to effectively remove any and all pension obligations (except the President's private plan) from the B.U. books.

What can we members do, other than get a job elsewhere? Leaving is an attractive option at the moment, and one which grows more attractive daily. We could try to save money on our own but, unfortunately, most of the saving would have to be done outside an RRSP because most members have very little contribution room left. Such savings would be subject to tax.

Our best option at the moment is to hold tight during the current strike and negotiate improvements to the current pension plan. At this point, raising the pension maximum is still doable. If we put this issue off for another 3 years, that may not be the case.