The University of Toronto, University of Guelph and Queen's University are one step closer to merging five existing university pension plans into the single, jointly-sponsored University Pension Plan Ontario.
Each of the three universities – working with their faculty associations, the United Steelworkers union and representatives of non-unionized employees – have achieved the necessary consent from members of their existing pension plans to allow the UPP to proceed.
At U of T, the Canadian Union of Public Employees, Ontario Public Service Employees Union, Unifor and the International Brotherhood of Electrical Workers unions have also consented to the conversion on behalf of the employees they represent.
“Everyone involved has worked incredibly hard to create what all participants believe will be a strong and sustainable pension plan for university employees when they retire,” said Angela Hildyard, U of T's special adviser to the president and provost.
“The administrations at the three universities are delighted we've received consent from employee groups and strongly support the move to the UPP to preserve a defined benefit pension plan in the university sector for generations to come.”
At a time when many employers are abandoning defined benefit pension plans – which offer members predictable retirement income based on salary and years of service – the jointly-sponsored UPP will preserve the defined benefit model for members and act as an important tool for member universities when it comes to employee retention and recruitment.
Other Ontario universities will be eligible to join the UPP once it is established, with the plan benefitting from a larger pool of money to invest as membership grows. Pension costs and risks will also be spread out over a larger number of members.
The UPP is similar to well-known jointly sponsored pension plans such as the Ontario Teachers' Pension Plan and the Ontario Municipal Employees Retirement System (OMERS).
“After the years of planning and consultation that went into designing a sustainable joint sponsored pension plan, I’d like to thank all University of Toronto pension plan participants for taking the time to engage with this process and provide their consent for the UPP,” said Kelly Hannah-Moffat, U of T’s vice-president of human resources and equity.
“Now we begin the hard work needed to transfer our existing pension plans and implement the new UPP.”
The new UPP could be up and running by July 1, 2021 once all legislative compliance activities and disclosures have been completed and the required approvals obtained. At that point, members of the universities’ existing pension plans will join the UPP, and active members will begin accruing benefits based on the UPP's provisions.
There will be no changes to benefit amounts already accrued.
As for next steps, approvals from the universities’ governing boards will be sought this fall and each institution will apply to the Financial Services Regulatory Authority of Ontario for approval to transfer the assets and liabilities of the existing pension plans to the UPP.
For more information, please visit the UPP website at www.universitypension.ca.