Pensions: a starting point for discussion

- March 2, 2011

We all know the economy has taken a hit. It's no secret that everyone – from government to individuals – is faced with making challenging decisions to adjust to this new reality. Dalhousie is no exception with cuts to government funding, declines in investment growth, and a pension plan that is not sustainable. So, the Dalhousie community needs to consider collectively how to best use existing resources while ensuring the budget is  balanced.

Not surprisingly, this is a topic of discussion across this country as universities, other institutions and businesses struggle to recuperate from the impact of the global recession. In order to put this discussion into context for Dalhousie there are three points to consider. First, the government grant has been reduced by more than $7 million. Second, tuition has been capped by three per cent and third, the university's current requirement for pension solvency is $7 million.

Temporary reprieve

Consequently, one challenge, among many, Dalhousie is facing is the continuing demands of the university pension plan. The importance of this issue comes, at least partly, because of the impact that solvency compliance has on our budget, especially in a climate of government cuts. Dalhousie has made some progress on this issue. Last year the university’s employee and retiree groups worked together with the administration to lobby for solvency relief from the provincial government and the subsequent agreement with the province gave us solvency relief until March 31st, 2011. This was, however, a temporary reprieve and the university needs to work now on extending this relief.

Everyone at Dalhousie understands the value of the current defined benefit plan, which promises a guaranteed income upon retirement. Many institutions, organizations and businesses, however, are moving to a defined contribution plan, which bases retirement income on the investment success of member contributions or to jointly sponsored defined benefits plans. Jointly sponsored pension plans allow employees, as co-sponsors, to share responsibility with the university for plan governance, trusteeship, and administration, including the level and kind of benefits provided.  

Identifying solutions

So, next year getting further pension solvency relief would reduce our financial challenge by about half. The government is more likely to grant this further relief, perhaps even for long term, as has happened in Alberta, British Columbia, and most recently, Ontario, if the university can show that it has adopted a jointly sponsored plan. This alone makes it worth serious discussion.  At the same time, we need to ensure that our plan continues to make Dalhousie University a competitive place for new faculty and staff.

The Budget Advisory Committee (BAC), which will issue a report next week, will be asking for input from all stakeholders on how Dalhousie manages the current financial situation and how we deal collectively with the pension is certainly an important factor; it's not the only factor, but an important one. Members of the Dalhousie community are encouraged to engage in these discussions and to help in identifying solutions that not only lead to a balanced budget but ultimately build a stronger university community.

For more information, see the BAC budget reports. For questions on pensions, please e-mail:

Charles Crosby is the official spokesperson for Dalhousie University.


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