FT pension plan update

FT pension plan update

The following message from UNB Human Resources & Organizational Development was just sent electronically to all active pension plan members, and the same text is being sent to retirees via Canada Post:

Information for Plan Members

The Parties to the Pension Plan for Academic Employees of the University of New Brunswick (AEPP) – namely, the University and the AUNBT – are committed to keeping you apprised of what is happening with your pension plan.

As both active and retired members of the plan are already aware, the AEPP has faced significant financial challenges for a number of years. As joint sponsors, the AUNBT and UNB have worked collaboratively to address this situation, culminating in changes to the indexing provisions in 2004 and the implementation of an improvement plan that covered the period between July 1, 2007 and June 30, 2013. During this time, active members of the plan accrued reduced retirement benefits and additional contributions to a Rate Stabilization Account were made.

Unfortunately, several factors beyond the control of the Parties – the world financial crisis, historically low interest rates and changes in mortality projections – have caused for these actions not to be successful and the AEPP finds itself in an even further deteriorated financial position.  According to the most recent actuarial valuation, the plan is only 72% funded with a 52% wind-up ratio.  To amortize this deficit and maintain the benefits would require a contribution rate for active members in excess of 15 to 17% of payroll, matched by the University.

Given this situation, the Parties have once again been working together to explore potential solutions.

Of particular interest has been the Shared Risk Pension (SRP) model that has been introduced in New Brunswick. Assisted by independent external actuaries and with expert advice from legal counsel and others, the Parties have examined this model and are now in the process of meeting to determine whether a mutually acceptable agreement can be reached to convert the Pension Plan for Academic Employees to an SRP.

The AUNBT team involved in these discussions includes:

–          David Bell, Vaughan Dickson, Dorothy Duplessis, Jula Hughes, Miriam Jones, Rick McGaw, Alyssa Sankey, Gopalan Srinivasan, Barbara Trenholm

While the UNB team is comprised of:

–          Rob Austin, Chris Callbeck, Larry Guitard, Ryan Johnston, Peter McDougall, Dan Murray, Barbara Richards

The Parties will continue to work diligently to bring this matter to a conclusion on a timely basis, preferably before the results of the last valuation are required to be implemented on July 1, 2013. The next meetings of the Parties are scheduled for late May and early June.

Further information will be communicated as soon as it is available. In the interim, active members or retirees are welcome to visit the AUNBT’s pension website at https://aunbtweb.wordpress.com/pensions/, UNB’s pension website at http://www.unb.ca/hr/academicempensionplan/index.html, or send an e-mail to aeppinfo@unb.ca

For more information on the FT pension plan, see Pension

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Categories: FT pension plan