EXIT FROM THE SOCIAL CONTRACT

In the fall we engaged in negotiations for our exit from the Social Contract. The Faculty Association argued that the distortions created by the Social Contract should be corrected. This position was accepted by the administration only on the condition that the faculty take an across the board salary cut. This was not a position we could accept. In final selection the selector chose the administration position of a salary freeze.

PENSION TEXT AND THE PENSION FUND SURPLUS

In the fall we also began negotiations to revise the pension text in light of the recent court decision regarding the pension surplus. These talks are still in progress. One concrete result has been the creation of a committee to discuss the non-transfer of University pension contributions to the pension fund trustee. The current surplus in our pension plan exceeds the maximum allowed by Revenue Canada. Current estimates put the size of the surplus at at least $135,000,000 and probably more. We are getting very near the point where even with normal rates of return and existing employee contributions, the surplus will continue to grow rather than fall. As a result, the University is not allowed to transfer its share of the cost of our pension plan to the pension fund trustee. To date, approximately $10,000,000 which should have been transferred to the pension plan has remained in University hands. Employee contributions continue to be transferred to Canada Trust making our pension plan 100% employee funded.

As a short term measure, there is agreement in principle within the Joint Committee, although the details have yet to be worked out, that a McMaster University Futures Fund (MUFF) be created. MUFF would be credited with the monies which should have gone to the Pension Fund Trustee but did not because of the Revenue Canada Limit on the size of the surplus. MUFA and the other employee groups have proposed that the income from this fund would be jointly managed by the administration and the employee groups. We hope to reach a final agreement on this issue in the near future.

NEGOTIATIONS FOR SALARIES AND BENEFITS BEGINNING JULY 1, 1996. Following extensive and difficult negotiations, the administration and MUFA reached an agreement regarding salaries and benefits for the year beginning July 1, 1996. Compared with the offer initially presented by the administration, the final deal reflects the value of MUFA to the faculty. It is a deal which completely eliminated the proposed permanent salary reduction of 15.1% for all salary above $30,000. In its place we will be taking three days off without pay next year valued at 1.2% of salary. Instead of 110 par units per 100 faculty in the CP/M scheme, we have negotiated 135 par units per 100 faculty. Of these 135 par units, 55 are to be based on merit assessments for the year 1994 and 80 units for the year 1995. The 135 par merit awards are to be added to nominal salaries July 1, 1996 and are worth on average to faculty 2.45%, although the exact amount depends on your position on the salary grid. Even after the unpaid days off, faculty on average will see a small increase in the amount of money they actually receive on July 1, 1996.

As well as the agreement on CP/M and days off without pay, we have agreed to a review of our benefits package. There are a number of areas where we may be able to redesign our benefits package to yield better value for money. We will continue to resist any attempt to cut our benefits.

We have agreed to two changes which will offer greater security for faculty once they have retired. We have agreed to a significant improvement in the pension indexing formula. The current formula indexes pensions only if the earnings from the plan exceed some minimum threshold in the year in question. We have agreed that if in any one year the threshold is not reached, the amount by which pensions should have been indexed will still be added to pensions if in either of the following two years earnings exceed a predetermined threshold. As well, for those opting for early retirement, the administration will allow faculty, up to age 65, to purchase life insurance through the University by paying the same premiums charged the University. This will be especially attractive to those taking early retirement who might lose their University life insurance and then be faced with buying life insurance on the open market at a much higher rate.

We agreed to a number of items regarding faculty workload. We agreed to terms and conditions for faculty teaching in the twilight hour from 5:30 to 6:20 p.m. It was also agreed that, as a result of the discussions during negotiations, deans would be asked to be sensitive to how the many changes occurring on campus are affecting faculty workloads. There was also a minor improvement in teaching and research support in the form of an agreement to provide a pool of $20,000 to cover faculty costs incurred using the self-funding modem pool.

The final item agreed to was that a ballot will be held regarding the future funding of MUFA. If the proposal submitted to ballot is accepted, all faculty on the CP/M scheme for whom the Faculty Association negotiates salaries, benefits and conditions of employment, would be required to pay Faculty Association dues, or would be required to direct a similar amount of money to a recipient to be determined by the Joint Committee.

THE STATE OF COLLECTIVE BARGAINING AT McMASTER

I leave it to the members of the Faculty Association to determine whether the package negotiated for you is one you can support. As one of my final acts as Chair of the Remunerations Caucus, I would be remiss not to share my own views on the health of our collective bargaining process. Reluctantly, I have come to the conclusion that the current system of final offer selection is not working in the interests of the faculty. It is a system which forces us to accept offers which we consider less than fair because of both uncertainty about how arbitrators might rule, and the increasing reliance on criteria other than fairness in arbitration decisions. The administration continues to see the faculty as a cash cow. The principles of faculty being paid on a salary grid with a large component of deferred income is recognised in discussion but not in deeds. We continue to hear the argument that awarding CP/M is a pay increase. It is not. Awarding full CP/M is simply maintaining our established life- time earnings. Deals which provide for less than full CP/M are life-time pay cuts for faculty.

Perhaps it is time we began thinking seriously about changes to our system for negotiating salaries and benefits. There are major items on the bargaining horizon, perhaps the most serious being how to salvage a respectable pension in light of current government limits. I would suggest we look carefully at the current changes occurring across Ontario at institutions such as Queens, Waterloo, and Brock for direction.

Wayne Lewchuk, Chair

Remunerations Committee

March 1996 Newsletter - Insert