Recent valuation confirms health, growth of MUN Pension Plan

The Memorial University Pension Plan continues to experience healthy growth, according to the most recent actuarial valuation. It shows the plan enjoys an actuarial surplus of $40.634 million (up from $14.035 million at the last valuation for March 31, 1997).

The plan is required to undergo an actuarial valuation at least every three years. The purposes of the valuation are to determine the funded position of the plan, to ensure it has sufficient resources to meet the obligations to the members and to determine the cost of the benefits that will accrue to members until the next valuation.

The most recent valuation (as at Dec. 31, 1999) was undertaken by Eckler Partners Ltd., the actuarial firm engaged for the Memorial University Pension Plan.

The pension plan is overseen by the University Pensions Committee, an advisory committee to the Board of Regents. The committee is representative of the entire university community and includes faculty (comprising one third of the membership), staff unions (comprising one third) and representatives of the administration, management and professional employees, non-bargaining unit employees, retirees, the Board of Regents, as well as external representatives. Among other responsibilities, the committee recommends selection of the actuarial firm of record.

In January 2000, the committee received a presentation from Peter Hayes of Eckler Partners in which he provided the rationale for the actuarial assumptions recommended for use in the valuation of the plan. The assumptions involved interest rates, salary increase estimates, mortality, retirement age, percent of members married and age difference of spouses. The committee unanimously accepted the proposed assumptions.

Report presented in April
In April Mr. Hayes presented the actuarial valuation results to the committee. The valuation concluded that the pension fund had assets of $467.269 million, comprised of invested assets with a market value of $494.952 million, less an investment reserve of $27.683 million. The investment reserve exists because a significant portion of the pension fund is invested in stocks. It is designed to smooth the effects of short-term market fluctuations.

The fund's actuarial liabilities were valued at $426.635 million, or $40.634 million less than the assets. This amount ($40.634 million) represents the actuarial surplus.

He also indicated that, on an annual basis, the current service costs (i.e., benefits earned by employees) exceed the contributions made by both the employees and university by $2,579 million. The implications of this matter will receive further study.

Unanimous acceptance
The University Pensions Committee unanimously accepted the report of Eckler Partners and further recommended that it be accepted by the Board of Regents. The Board approved the actuarial valuation at its meeting of May 3, 2000.

For further information, copies of the actuarial valuation report are available in the QE II Library. The report is also on the web at www.mun.ca/humanres/benefits/index.html.

The University Pensions Committee of the Board of Regents includes:

Chair:
Fred Durant, Board of Regents

Secretary:
Dr. George Hickman, (ex-officio), director, Human Resources

MUNFA representatives:
Dr. John Bear, Medicine
Maurice Brewster, Education (retired)
Dr. Raymond Clark, Classics
Dr. Veeresh Gadag, Medicine
Dr. Rajendra Gupta, Business Administration
Dr. Stuart Lodge, Medicine
Dr. Sankatha Singh, Mathematics and Statistics
Dr. Frank Smith, Chemistry (retired)
Andree Thoms, French and Spanish

External representatives:
Kevin Dunphy
Ray Smallwood

Staff union representatives
John O'Leary, CUPE 1615, Physical Education, Athletics and Recreation
Wayne Holly, CUPE 1615, Physics and Physical Oceanography
Allan Goulding, CUPE 1615, Physics and Physical Oceanography
Richard Newman, CUPE 1615, Engineering and Applied Science
Jane Ryan, CUPE 1615, QE II Library
Ann Sanger, CUPE 1615, QE II Library
Ed Brown, NAPE 7405, Marine Institute
Brian White, NAPE 7801, Facilities Management
Jeannie Haynes, NAPE 7803, Facilities Management
Arnold Johnson, NAPE 7804, Facilities Management
Barry Hanlon, NAPE 7850, Marine Institute

Management, professional and executive group:
Harold Squires, Budgets and Audits

Pensioners:
John Lewis, Memorial University Pensioners' Association

Ex-officio
Edward Roberts, chairman, Board of Regents
Dr. Axel Meisen, president and vice-chancellor
Wayne Thistle, vice-president (administration and finance) and legal counsel
Glenda Willis, manager, Benefits and Pensions, Human Resources
Eleanor Bennett, secretary, Board of Regents