What is the rush? Why does the university seem to be in such a hurry to implement changes to the QPP?

Quick action is required to reverse the underfunding of the plan and make the most of the solvency relief options that have been put forward by the Ontario government. The plan’s actuaries have confirmed that the university needs to have a remediation plan in place as quickly as possible to help prevent the problem from escalating to unmanageable levels.

The law requires the valuation of pension plans every three years.

The QPP is due for its next valuation at the end of next month – on August 31, 2011. The valuation is a “snapshot” of the financial state of the plan on that date. August 31 is, therefore, critical because the state of the plan on that date will determine what additional contributions the university will be required, by law, to make over the next three years. Those additional contributions are required to bridge the gap between what the plan has in it and what the provincial law says must be in it – and the larger the payments, the greater the impact on the university’s operating budget.

If nothing is done, and the government’s solvency conditions aren’t met, the university’s contributions would have to rise to over 30% of payroll to meet our funding obligations (right now, the university contributes about 10% of payroll while employees contribute 5% of their pay). That would mean an additional $70 million annually would be drawn away from the Queen’s operating budget. The current total operating budget is just under $400 million.

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2 thoughts on “What is the rush? Why does the university seem to be in such a hurry to implement changes to the QPP?

  1. Stevenson Fergus

    And yet, at the bargaining table, the administration reported to the QUFA bargaining team that the university will be able to file an amended certificate after the 31 August 2011 valuation date, and will not have to wait three years for the next valuation date.

    The Queen’s Pension Plan is sure to qualify for the Ontario government’s first-stage solvency relief, and will then have until 2014 to develop a well-thought-out plan to qualify for second-stage solvency relief.

    The administration appears to be creating a sense of urgency to unilaterally increase employee contributions while decreasing benefits, so as to meet the Board of Trustees’ arbitrary requirement for a balanced university budget by March 2012.

    As pension plan beneficiaries, it is in all of our interests to come together and address the solvency issue. It upsets me to see the administration acting in such a heavy-handed way.

    Bargaining Alert 13: What the Administration Wants to do to Your Pension
    Bargaining Alert 15: Why QUFA Needs a Strong Strike Mandate

    Reply

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