Pension Report 2018-09-24

What’s up with pensions?

Jim Wyse, Faculty of Business

The big ‘whats-up’ is the change in the pension plan governance model from Sole Sponsorship to Joint Sponsorship. Since the plan’s inception many decades ago, the Provincial Government has assumed sole responsibility for covering the pension plan’s financial deficiencies. In fulfilling its sole sponsorship role, government normally approved the University budgetary provisions required to address unfunded pension liabilities.

Recent changes in government’s financial circumstances combined with unfunded pension liabilities now totaling hundreds of millions of dollars (in the MUN Pension Plan alone) resulted in government’s unwillingness to fund the University’s pension-directed budgetary components.

These circumstances motivated the move from the Sole Sponsorship approach for funding pensions to a governance model in which the responsibility for pension liabilities is jointly shared with employees and their employer. Joint Sponsorship is by far the major ‘what’s-up-with-pensions’ and its formulation and institutionalization are the subject of much activity.

Throughout the past two years, a special subcommittee of the Board of Regents Pensions Advisory Committee (PAC) has been hard at work developing proposals for the structure and processes for the Joint Sponsorship governance plan. The subcommittee’s work is being supported by individuals from beyond the University with pension-related financial, administrative, and legal expertise. Joint Sponsorship governance models are generally tailored to the circumstances of the employer (public versus private, etc.) and the structure of its employee groupings (unionized versus non-bargaining, etc) and thus come in many flavours. A MUN-flavoured formulation is expected to be in operation early in 2019.

Source: Your Voice Sep. 2018 Vol 16 No 4