The Pension Issue

Bargaining Updates 2016

Over the past three bargaining rounds we have, through our bargaining blogs, talked frequently about the UBC Faculty Pension issue for Lecturers, Sessionals, and all members working at and beyond age 71. It is sufficiently important to talk about it again.

We do not have a standard defined-benefit pension plan like faculty at the University of Toronto and many other universities. What we have is a defined-contribution savings plan, which is basically a locked-in group RRSP plan. For those of us in the plan, UBC puts a certain percentage of our salary into the tax-sheltered savings plan, and we save a certain percentage of our salary in the same plan. According to the Collective Agreement (Part 2, Article 7.06) “UBC’s Faculty Pension Plan is a defined contribution plan, with members contributing 5% of salary and UBC contributing 10%.” Actually UBC does not contribute 10% of salary into the plan. The percent it contributes depends on a member’s salary, rising from a low of 8.3%, at a salary of $55,300, to 9.1% at a salary of $100,000, to 9.5% at a salary of $200,000, and so on.   We grieved this violation of the plain meaning of the Collective Agreement, but were unsuccessful.

The crucial thing to understand about the “pension” plan is that the member’s contribution is forced savings, and the University’s contribution is compensation. The position of the Association is that since UBC’s pension contribution is part of our compensation package all members should be entitled to that portion of compensation.  Currently three groups of members are denied that compensation and we have made a number of different proposals at the table that, in total, would ensure all members receive full compensation, including the pension contribution.

First, Lecturers whose appointment term is less than one year are denied the pension component of compensation. Imagine Lecturer A has a 334 day appointment (it happens) at an annual salary of (say) $75,000 and Lecturer B has a 365 day appointment at the same annual salary. Lecturer A works only 91.5% as long and her total annual compensation is correspondingly only $68,630. Lecturer B works the extra month for a full salary of $75,000 and also gets the pension component of compensation.  Her total compensation, including pension, is $81,568. That’s right, by working 91.5% of the year Lecturer A get 84.1% as much total compensation as Lecturer B, who worked the full year. The only word for this is inexplicable.

Second, Sessionals who work less than 50% of a full-time workload or less than 4 months, are denied the pension component of compensation. Imagine two sessionals in the same department in Arts teaching the same course. One teaches three courses in one term, the other teaches one course in each of winter terms 1 and 2 plus one course in the summer. If they both earn $6,516 per course (the bottom of the Arts minimum scale), they will both earn a bit less than $20,000 in salary, but only the former will get the pension component of compensation (about $1,700). There is no logic to this.

Finally, any member will suffer a cut in compensation at age 71 because the University will no longer contribute the pension component of compensation to the group RRSP plan (because the Income Tax Act prevents them from doing so). UBC refuses to work out with us an alternative mechanism for that compensation to be paid to those members. It is not like the Income Tax Act prevents UBC from contributing the full compensation amount for such people. For example the Income Tax Act also prevents UBC from contributing more than the maximum annual amount to the pension. For members whose salaries are greater than about $182,000, that means UBC cannot contribute the normal full (almost) 10% of salary to the plan. Does UBC then cut their total compensation by not paying out the excess to those members somehow? No, of course not. In this case the contribution in excess of the maximum allowable amount is placed in a “Supplemental Arrangement.” As it should be, because failure to find an alternative way to pay that component of salary would be to deny them the full compensation to which they are entitled. Which is exactly what they do for those over 71. Inequitable. The Association has launched a grievance on this matter, and we have also proposed, at the table, that faculty over the age of 71 receive salary in lieu of that portion of their total compensation that can no longer be contributed to the Faculty Pension Plan. We do not believe UBC is entitled to cut members’ total compensation just because they have reached the age of 71.

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Next up on the blog: Maternity/Parental Leave