M E M O R A N D U M
April 13, 1998
TO: MUFA Members
FROM: L. Robb, MUFA Pension Chair
RE: Ballot - Pension Text and Memo of Understanding
On the attached ballot we are asking you to approve a revised pension
plan text and a Memorandum of Understanding regarding University Administration
Expenses to be charged to the Pension Fund. These two items are part of
a larger agreement, as I will explain below, that attempts to bring closure
to matters left unclear after the court case launched in 1990 and ended
in 1995 in which we challenged the legitimacy of some amendments which
had been made to the text.
The first matter concerns the Pension
Text. We have not had a complete, agreed upon, text since the end of
the court case. When the court threw out some amendments it was unclear
legally which text we returned to and the different parties had different
interpretations. Nevertheless, we have developed an understanding and agreement
on the items remaining and have been approving amendments by our usual
processes over the past few years. These amendments have already been approved
by you. Some changes, such as improvements to indexing provisions and pension
holidays for employees, were part of our last remunerations agreement and
were voted on at that time. Other changes, such as the new pension bridging
agreement, were voted on separately. All of these are incorporated in the
new Text. Finally, some wording changes to the Text have been required
by Revenue Canada; these amendments too have now been incorporated. It
is the new text dated July 1, 1997 for which we are seeking approval. To
some extent, this is a formality and you might wonder why we are bothering
as we have approved the individual items separately already or they are
required by law. However, by approving the text as a whole, we will create
an unambiguous starting point for all future pension discussions and negotiations.
It is in this context that your Pension Committee and Executive believes
it is wisest to go through the balloting exercise at this time. I include
for your information a memo from Sandy Darling to the Pension Trust Committee
which summarizes the changes, along with a final revised version of the
text [Darling memo follows this memo].
One of the items on which we have not had agreement in the past is the
charging to the Pension Plan (or, more properly, the Fund) of administration
expenses incurred at the University in connection with pensions. This practice
has been with us since the mid 1970's but during the court case referred
to above Canada Trust, as trustee of the Plan, refused to pay these expenses.
Once the court case concluded, payments from the Fund recommenced. Your
pension representatives have, at various times, acknowledged that it is
reasonable that such expenses should be charged to the Fund, but have always
insisted that it was necessary also that there be some way of limiting
the expenses charged to amounts which we would all agree are reasonable.
It is to provide this protection that we have the Memorandum of Agreement
which we are now asking you to approve. The Memorandum
is attached.
If you want to delve into this matter more deeply, please note that
there is a working copy of the pension text in the MUFA office which highlights
the amendments that have been incorporated (though there have been a few
minor changes since the highlighted copy was created). You are welcome
to consult that text (though please call ahead as meetings may be going
on in the offices). Note, too, that these items will be discussed at the
MUFA Annual General Meeting (Wednesday, April 22, 1998, 2:00 p.m., Convocation
Hall).
March 3, 1998
TO: Pension Trust Committee
FROM: A. L. Darling, Vice-President (Administration)
RE: Pension Plan Text
In the summer of 1997 the Administration indicated that it would prepare
a consolidated pension plan text that would incorporate all amendments
approved since the last text was published. This task has taken some time
and discussion with employee groups, because there had been a court case
involving the McMaster Pension Plan.
The starting point for this process was the text approved in 1992. Any
areas of dispute were confined to sections 7, 14 and 15.
After the appeal court rendered its decision, the President of the University
established a working group to deal with the disputed sections of the text.
That group also dealt with changes required by Revenue Canada. A series
of changes was then approve d in October, 1996.
It was also necessary to incorporate some amendments that were duly approved regarding Clinical Faculty.
There was a third set of amendments that were approved in the summer
of 1997.
The consolidated text was distributed to member associations in the
fall of 1997 and there have been subsequent discussions since that time
with some changes that are primarily editorial in nature to make sure that
the intention is clear. It is now recom mended that the consolidated pension
plan text be approved with an effective date of July 1, 1997.
Pension Trust Committee - FOR APPROVAL
March 12, 1998