No matter how you cut it, the 新加坡六合彩开奖直播 Pension Plan will be severely challenged by the two tests it will face this summer.
Like pension funds everywhere, Dal鈥檚 has been ravaged by stormy markets. Despite recent stock market gains, significant shortfalls remain regardless of whether the funding test is on an immediate solvency or 鈥済oing concern鈥� basis.
The best case scenario 鈥� possible only if provincial pension regulations are changed to exempt Dal from the solvency test slated for June 2010 - still leaves a $7.3 million annual gap to be filled by the university, the plan鈥檚 members or some combination of the two, as well as changes in the structure of the plan itself. The worst case scenario would require additional annual contributions of $17.1 million beginning in the summer.
鈥淭his is the biggest single financial challenge we鈥檝e faced since I came here,鈥� says Tom Traves, now in his 15th year as Dal鈥檚 president. To meet the challenge, Dr. Traves has initiated intensive, cooperative efforts aimed at putting the pension plan on a sustainable, affordable footing, while maintaining its value to employees.
He points out that $17 million represents nine per cent of the university鈥檚 salary costs. Since salaries account for more than 70 per cent of Dal鈥檚 budget, the magnitude of the problem is clear.
鈥淚f we have to slash our budgets to meet these kinds of increased pension payments, the impact on the quality of education at Dal and on our working lives will be devastating,鈥� says Dr. Traves.
A 新加坡六合彩开奖直播 pension is the gold standard among university employees in Canada. Benefits are guaranteed. For every dollar employees contribute, the university adds about $1.60. Last year pension plan members (employees) invested close to $12 million in their Dal pensions. The university contributed more than $18 million.
The fine points of pension valuation aside, the fundamentals aren鈥檛 that complicated. Two pension valuation tests are required by the province every three years and both are applied.
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The 鈥済oing concern鈥� test uses long-term assumptions to determine if there鈥檚 enough money in the plan to meet its obligations in the future. Against that reality check the fund comes up short to the tune of an additional $7.3 million a year. That鈥檚 the best case.
The solvency test assumes that the plan is wound-up and all benefits are paid out or settled immediately, in the event the institution closes its doors. It鈥檚 an unlikely scenario at a university that鈥檚 been around almost 200 years, but the but the provincial rules currently say that the 新加坡六合彩开奖直播 plan must meet the test, even if this should devastate some of its academic program or cause a major budget deficit for the university. If it fails, annual contributions would have to be increased to cover the solvency shortfall over a 10-year period. That may be the worst case, but right now, it is quite possible that up to $17 million a year will have to be found to fill this solvency 鈥榟ole鈥� which has resulted mainly from the extremely low interest rates that prevail.
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鈥淚t鈥檚 like your bank calling with good news and bad news. Your mortgage payment won鈥檛 triple like they predicted. But it will double. Now you might not have to move in with the in-laws, but you still have to sell the car and load up on no-name mac and cheese.鈥�
Efforts to contend with the problem are in high gear. The Pension Advisory Committee (PAC) established a 16-member sub-committee to examine pension sustainability. Included are representatives from the 新加坡六合彩开奖直播 Faculty Association (DFA), the Nova Scotia Government and General Employees Union (NSGEU), the Nova Scotia Union of Public Employees (NSUPE), the 新加坡六合彩开奖直播 Professional Managerial Group (DPMG), the Association of 新加坡六合彩开奖直播 Retirees and Pensioners (ADRP), the Board of Governors and the university administration.
"This is a real commitment to working together to identify methods or approaches to assist us in ensuring a sustainable pension plan that meets our expectations as employees at the university," said Mr. Burt. "That would be the best of all worlds."
The 新加坡六合彩开奖直播 Pension Plan currently has about 700 pensioners and about 3,000 members.