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Queen's posts financial statements

The Board of Trustees approved Queen’s 2013-14 audited financial statements, which provide an overview of the university’s financial results for the fiscal year. The statements show a surplus of revenues over expenses of $45.6 million, driven primarily by investment returns.

Caroline Davis, Vice-Principal (Finance and Administration)

“The university’s endowment fund produced a return of 15 per cent.  In accordance with the university’s endowment payout formula, 3.5 per cent was paid out to fund operations, while the remainder was reinvested to preserve the value of the endowed capital.  The pooled investment fund returned 13 per cent, allowing Queen’s to eliminate its cumulative operating deficit,” says Caroline Davis, Vice-Principal (Finance and Administration). “This means that the university’s investments have now recovered from the 2008 global financial crisis.”

The financial statements, which are available online, contain an in-depth discussion of the various factors influencing the university’s financial situation.  Vice-Principal Davis says that despite the good news about the surplus, significant financial challenges still lie ahead.

“There is still uncertainty around government funding and the university faces a significant deferred maintenance deficit. In addition the university does not have a financially sustainable pension plan, and measures to address this continue to be reviewed,” says Vice-Principal Davis.  “Even the current year’s excellent investment returns are not enough to eliminate the solvency deficit, and it will be important to reach a point where the government will no longer need us to apply a solvency test.”

Under government regulations, the Queen’s Pension Plan must be tested for solvency as of August 31, 2014. The government will require the solvency deficit to be dealt with over a 10-year period beginning in 2015. The university may qualify for a further three-year exemption on solvency payments, but if that option is selected, the payments would be spread over the following seven years rather than 10, resulting in higher annual payments.

The plan’s actuaries are currently working on the valuation, and at its Sept. 19 meeting, the pension committee of the Board of Trustees discussed with the actuaries various assumptions that underlie their work.  The results will be available in a few months’ time.

Provost and Vice-Principal (Academic) Alan Harrison agrees that efforts must be made to address the financial challenges.

“As we develop the 2015-2016 budget, scenario planning will allow us to identify the probable magnitude of the effect on units of any additional pension solvency payments that may be required,” says Harrison. 

Further information about the pension plan’s solvency deficit, and the options open to manage it, is available on the pension website. Information about the university’s budget process is available on the provost's website