Spring 2007

UGRAUGRA

UNIVERSITY OF GUELPH RETIREES ASSOCIATION,P.O. Box 4916,University of Guelph, Guelph, ONN1G 2W1

Two UGRA Awards are given in semester two (January) with

financial need used to determine the recipients from amongst the

eligible candidates. Please be sure any eligible family member is aware

of these opportunities. In each case application is made to Student

Financial Services. The application deadline is in early October so

application should be made as soon as possible after the start of the

fall semester.

University of Guelph Retirees Association Diploma Scholarship

An annual bursary of $500 is made available to students registered

in a Diploma program at the University of Guelph or affiliated

Regional Campuses with a minimum cumulative average of 75%

("B") in the last two semesters of full-time study who are related to a

member of the University of Guelph Retirees Association (UGRA) as

child, grand-child or great grand-child.

Selection will be based on greatest financial need. Apply to Student

Financial Services with a completed Financial Need Assessment Form

and a letter indicating name of and relationship to an UGRA member.

University of Guelph Retirees Association Degree Scholarship

An annual bursary of $1000 is made available to students

registered in an undergraduate degree program at the University of

Guelph with a minimum cumulative average of 75% ("B") in the last

two full-time semesters of study and who are related to a member of

the University of Guelph Retirees Association (UGRA) as child,

grand-child or great grand-child.

Selection will be based on greatest financial need. Apply to Student

Financial Services with a completed Financial Need Assessment Form

and a letter indicating name of and relationship to an UGRA

member. UGRA

UGRA SCHOLARSHIPS

IN THIS ISSUE

@President’s Message

#UGRA Executive Committee

Meets With President Summerlee and

Vice-President Sullivan

Communications with Retirees

$University of Guelph Retirees

Association Brief to thePensions and Benefits

Committee of the Board of Governors

%Financial Statements

^Tour of the Biodiversity

Institute of Ontario

&Meet Your New UGRA President

Third Age Learning Fall Program

List of Retirees

*UGRA Scholarships

Convocation Request

NEWSLETTERU n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n

UGRA Info-line: 824-4120 ext. 52197

This year the Annual GeneralMeeting will be held in

Rozanski Hall which is a morecomfortable venue than the EastResidence Town Hall, the site ofprevious AGMs. Rozanski Hallis located across the road fromthe Bull Ring and is a short walkfrom the Gryphon Dome, thelocation of the President’sLuncheon (See map).

Refreshments will beavailable at 9:00 a.m. The AGMwill begin at 9:30 a.m. UGRA

THE UGRA ANNUAL MEETINGWILL BE HELD ON

FRIDAY,JUNE 15, 2007

TIME: 9:30 A.M. – 11:30 A.M.

LOCATION: ROOM 102,ROZANSKI HALL,

UNIVERSITY OF GUELPH

1. Approval of the agenda.

2. Approval of the minutes of the 2006 annual meeting.

3. Business arising from the minutes.

4. President’s report.

5. Treasurer’s report.

6. Committee reports:

• Pension committee

• Benefits committee

• Scholarship committee

• Web site committee

7. CURAC report.

8. New business.

9. Nominations for 2006 – 2007.

10. Election of executive.

11. Transfer of office.

12. New President’s remarks.

13. Nomination of auditor.

14. Adjournment.

(Copies of the various reports will be available at the meeting)

ANNUAL MEETING AGENDA

Rozanski Hall

CONVOCATION REQUESTConvocation is an opportunity for the campus community to

come together to celebrate the achievements of the year’sgraduating classes. Every year a number of volunteers return tocampus and provide much appreciated support at this event. TheUniversity would welcome the support of members of the RetireesAssociation at these celebrations handing out name cards, hoodsand programs, and robing the graduates.

This year will see the largest graduating class in U of G history,thanks to the “double cohort” students who arrived in September2003. Now, ready to make their way into the world, they areboosting summer graduation numbers by more than 30 per cent. Asif that weren't enough to keep organizers hopping, this June alsomarks the installation of Guelph's new chancellor, Pamela Wallin.

Because of the extra large graduating class this year and toaccommodate their guests the University has scheduled threeevening ceremonies. Ceremonies will be held on Monday, June 11,Tuesday, June 12 and Thursday, June 14 at 10:00 am, 2:30 pm and7:00 pm. The installation of the Chancellor will be on Wednesday,June 13 at 2:30 pm.

To find out more and learn about opportunities to volunteerplease contact Leslie LaCelle at 519-824-4120, ext. 56954 orl.lacelle@exec.uoguelph.ca UGRA

The Gryphon Dome: site of the President's luncheon.

UGRA • UNIVERSITY OF GUELPH RETIREES ASSOCIATION • MEMBERSHIP SUPPORT FORM

Membership Year: April 1 to March 31

YES! I want to promote the welfare of retirees and to help UGRA foster a mutually beneficial relationship with the University of Guelph. Please accept my cheque for $20 as a contribution to assist with administration.

NAME:

ADDRESS:

CITY/PROVINCE: POSTAL CODE:

EMAIL:

I would like to receive more information about serving on the Executive of UGRA or on one of itscommittees. I can be reached by telephone at:

Please make the cheque payable to: UNIVERSITY OF GUELPH RETIREES ASSOCIATION Mail this form with your cheque to: UNIVERSITY OF GUELPH RETIREES ASSOCIATION

UNIVERSITY OF GUELPHGUELPH, ONTARIO • N1G 2W1

✃

7UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter2

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

THIRD AGELEARNING FALL

PROGRAMThis fall Third Age Learning – Guelph will

resume its lecture series as its 39th seasonbegins. The two series of continuing educationlectures are intended for retired people in theGuelph and area community. All sessions areheld at the Arboretum Centre on campuswhere there is ample free parking.

The morning lectures will run from 10:00a.m. – 12:00 noon and the afternoon lecturesfrom 1:30 – 3:30. Each course costs $30.00.

The two topics for the fall 2007 season willbe China, the Next Superpower andPhilosophers, Eastern and Western. There willbe a series of 8 lectures in each topic; the list oftitles and speakers is still in preparation.

Further information and registration formswill be available from the third age learning web site at

www.thirdagelearningguelph.ca UGRA

LIST OF RETIREESRETIREES SINCE FEBRUARY 1, 2007

NAME DEPARTMENTCal Swegles Human Resources

Howard Swatland Animal & Poultry Science

Tim Sauer Library

Karen Walker Special Services

NAME DEPARTMENTDana Paramskas Languages & Literatures

Douglas Dalgleish Food Science

Margaret Shaw Hospitality and Tourism Management

Barbara Funk Counselling

Iwish in this, my last report, I hadbetter news to share, but as you will

learn later, that is not the case.President Summerlee and VP –

Finance & Administration NancySullivan met UGRA Executive at ourFebruary meeting. As I was in Ottawa Idid not attend. Ted Burnside, UGRA

Vice President chaired the meeting in my place.We have been more aggressive in our relations with the

University this year, commencing with this meeting andcontinuing in subsequent correspondence. This change in ourstyle drew clear and frank replies. The University does notrecognize UGRA as the exclusive representative of Universityretirees. They do not intend to negotiate with UGRA. They willcontinue to consult with us, meet with us and shareinformation.

Most of our energy this year focused on two briefs, ourPension brief and our Benefits brief. Our Pension brief containsa strong, detailed chronicle of the diminished income ourmembers experienced as a result of a failure by the Universityto provide ad hoc adjustments needed to protect our membersfrom inflation. The brief also contains unfavourablecomparisons between how University of Guelph retirees aretreated when compared to those at other universities in ourregion. And finally, it makes recommendations to redress thisproblem. The Brief will be presented to the University’sPension and Benefits Committee May meeting.

Our Benefits brief outlines deficiencies in current coverage,identifies other universities where coverage is better and offersrecommendations to improve our own benefits.

Unfortunately our briefs are coming forward during aclimate of extreme financial challenges facing the University.Last week, President Summelee announced that theUniversity’s budget is in a “devastating” deficit ofapproximately $ 20,000,000. As well, the recent evaluation ofthe pension funds reveals it to also be in large deficit position.While we may challenge the University’s priorities and pastmanagement choices, the University’s decisions on retirees’requests for improved pensions and benefits will be made inthe reality of current financial conditions.

More unwelcome news comes in the form of increases inHealth and Dental premium to take effect in May. Because theUniversity’s share of these premiums is 70% for health and 50%for dental premiums I assume they negotiated hard to obtainthe best deal available. But still, it is a burden imposed on uswithout increases in income.

On a positive note, the situation of an UGRA member andspouse who were subjected to poor treatment by Sun Life’sItalian representatives responsible for providing assistance andinformation to retirees who become ill or injured whiletraveling abroad was resolved to the satisfaction of the retiree.The retiree’s vigorous and competent pursuit for justice in thissituation has produced changes that will benefit retireestraveling abroad in the future. The retiree in this case may writea submission for our Fall newsletter outlining the case so thatother retirees may be guided in the event they may be exposedto similar circumstances.

As well, we have worked closely with the Universitybargaining groups, which includes the Faculty Association,attended the Stakeholders’ meetings and addressed over 500staff at a Town Hall meeting where we stated our displeasure

with the University’s treatment of retirees pension benefits. Last June, when I accepted the Presidency, I promised to

focus my efforts on our single most important concern, ourpension benefits. I and our executive devoted many hoursduring the past year to this issue. We gave the attention andhard work needed to produce a brief that provides acompelling case for improved pension benefits to retirees.

While it has been a busy period for me as President, otherUGRA members devoted generous amount of time and energyon behalf of all retirees. Our new members gave our executivefresh “legs”, ideas and valuable knowledge and insights.

Sally Stoddard provided outstanding support throughout theyear by giving us detailed minutes on a timely basis. Oftenthese minutes were complicated and very long. Sally alsoensured we had agendas well in advance of our meetings. Sally,I appreciated your support very much. Thank you.

As chair of our Pension Committee and a member of theUniversity’s Pens & Bens Committee, David Hull workeddiligently to ensure, along with his committee members JohnBenson, Dale Lockie and Roger Hacker that our brief onpensions was completed, discussed, approved and submittedon time to the Pens & Bens committee.

Our Treasurer, Pat Hoare provided us with the financialinformation we needed to ensure we could conduct ourbusiness, continue our newsletters and honour our scholarshipcommitments. She had to make many trips to the University tocollect our mail and make numerous trips to our bank todeposit your fees.

Wayne Marsh, our Past President, assumed responsibility forproducing our three newsletters. Discharging thatresponsibility required a significant time commitment whichhe willingly gave. As well, he chaired our NominatingCommittee.

Bruce Koenig kept our Web Site current, Carolyn Pawleymonitored our scholarship program and Ken Grant agreed toexplore ways of increasing the number of active UGRAmemberships.

Gil Stetler assisted Ted on the Benefits Committee.I think we have had a successful year in that we

accomplished what we set out to do. And, although ourrelations with the University have eroded slightly, at least theyand we have a clear and unambiguous understanding of ourpositions on various topics. I hope our brief to the UniversityPension and Benefits Committee will result in positiveoutcomes.

And finally, I’d like to acknowledge the very hard work thatour Vice President Ted Burnside has done this past year. He ischair of our benefits committee but beyond that he has been aconsistent participant at the Stakeholders meetings, a veryactive executive member and a constant support to me. Ivalued his counsel and suggestions. He will be an effectivepresident and leader of UGRA in 2007 – 2008.

In closing, I encourage you to plan on attending our AnnualGeneral Meeting in June which takes place in the morningbefore the President’s Luncheon for retirees. Please considerbecoming actively involved with your executive and as I havein the past I urge you to become a fee paying member of UGRA.

Have a wonderful Summer. UGRA

Allan McInnis CAPresident – UGRA – 2006 - 2007

PRESIDENT’S MESSAGE

Al McInnis

Your IncomingPresident for

2007-2008 is Dr.Ted Burnside, a

resident of Fergus with his wife Laurene.Ted served on the faculty of the OAC inthe Department of Animal and PoultryScience from 1964 through 1994, as aProfessor and Founding Director of theCentre for Genetic Improvement ofLivestock. He then served a 4-year termas VP Academic at the NSAC Truro,Nova Scotia, followed by a 4-year termas Senior Geneticist at Semex Alliance.He continues to consult in AnimalGenetics with Gencor, Guelph, andGeno Global, a Norwegian CattleBreeding Company. Ted was a CivilServant before moving onto the

University of Guelph Faculty in 1965.Ted comments on those happenings 42years ago. “They told us we would neverbe disadvantaged by joining on asfaculty at Guelph, vis-à-vis being anemployee of the Government of Ontario,and all of the old-timers retired! Theywere right-minded about that decision!”Ted says, after reviewing the currentPension crisis. “My aim in working overthe past 4 years with the UGRAExecutive is to see that the University ofGuelph recalls and fulfills its moralobligation to the retirees by fullyindexing their pensions! Let’s all join upwith UGRA, and get behind theExecutive as we push the administrationin the right direction!” Email: tedburnside@sentex.ca UGRA

MEET YOUR NEW UGRA PRESIDENT

Ted Burnside

3UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter6

UGRA EXECUTIVE COMMITTEEMEETS WITH PRESIDENTSUMMERLEE AND VICE-PRESIDENT SULLIVANTed Burnside, who chaired the meeting,

welcomed and thanked the President andVice President for attending the UGRA Boardmeeting.

Our guests were informed that the UGRABoard would be tabling a brief for submissionto the Board of Governors Pens & BensCommittee. Since 1999 inflation protection forUniversity of Guelph retirees has deteriorated.Over 9% of the 1999 purchasing power hasbeen lost due to failure of the University tomake ad hoc adjustments. This problem willonly get worse if no retroactive adjustmentsare made and if the 2% deductible issue is notaddressed. In fact if this situation is notremedied soon it will be very costly and nearlyimpossible for the University to bring pensionsback to full purchasing power.

The President responded that the situationis not what he would wish. Adverse marketconditions, low long-term interest rates, andthe solvency deficit have not helped thepension fund and, therefore, the University isnot in a position to make ad hoc adjustments.If the solvency wind-up issue was addressedby the Province an ad hoc adjustment mightthen be possible.

Comparisons of inflation adjustmentpolicies of sister institutions with definedpension plans were made. The University ofGuelph is at a distinct disadvantage whenhiring or retaining employees, compared toWaterloo, Toronto, and even McMaster, whichhas provision for making retroactive ad hocadjustments to pensions while the other twosister Universities have had full pensionprotection in recent times. PresidentSummerlee said that research has shown thatpost-retirement income is not a majorconsideration for prospective employees.

It was also pointed out that CPI minus 2%might have seemed like inflation protectionwhen inflation was 5% or more, but that since2000 with inflation at about 2% and withGovernment policies to keep it at that level,the existing pensions have little or no inflationprotection.

It was stressed that for all retireesdeteriorating pensions is a very seriousproblem and many pensioners are facinghardship. The President understood ourconcern, but pointed out that the projectedbudget deficit of $15,000,000, the solvencyrequirement of $31,000,000/year over the nextthree years, the anticipated 6 per centoperating cost increase with only a 0.5 per centincrease in provincial funding have putunprecedented demands on University funds.Employee groups, retirees, students are allvoicing their needs. He does not see ad hocadjustment for a very long time. If the planscould afford it, the administration would makead hoc adjustments a top priority.

Nancy Sullivan stated that the Province hasannounced the establishment of a commissionto examine defined benefit pension plans.There are seven universities in the Provincewith defined benefit plans and COU will bemaking a presentation. Unfortunately thereport will not be completed until summer2008.

It was pointed out that an ad hocadjustment is a minor expenditure comparedto the very sizeable demands placed on theUniversity, for pension fund solvencyadjustment. The cost for a one-year ad hocadjustment was estimated between $2,000,000and $4,000,000. The President said that if theUniversity were to fund an ad hoc adjustmentfor its retirees at this time it would undercutthe argument the University is making to thegovernment for relief from the current pensionsolvency rules. The question was raised whythe University was opting to pay the solvencyrequirement in three years when thegovernment has granted the University fiveyears to do so.

President Summerlee recommended that ifthe solvency issue were to be removed, weshould then spend time thinking about thedesign of our pension plan and contributionrates, keeping in mind the University’schallenge of falling revenues and increasingcosts.

The President asked the Executive how theUniversity could satisfy UGRA’s concerns.Several suggestions were made:• It would be helpful to have a statement that

would define the position of theadministration on ad hoc increases, and animmediate ad hoc increase would be the bestsignal that the University could possiblysend that it is deeply aware of our concernsfor all pensioners.

• UGRA would like to play a role in any futurepension plan review.

• A successor to ACPB should be formed toevaluate the possibility of ad hocadjustments.

• The retiree representative on the Pensions &Benefits Committee of the Board ofGovernors should be formally appointed byUGRA. We would then have moremeaningful representation.

Benefits issues were then discussed. It wasreported that the Benefits Sub-committee hadreviewed our Retiree Group Insurance BenefitsPlan and compared it with those at otheruniversities. The most significant difference issemi-private hospital room coverage, which islimited to 180 days at the University of Guelphand one other university. All other universitieshave unlimited coverage. The coverage forhearing aids is only $300 over a period of 5years which is very low considering their cost.It is difficult to negotiate for improvements,since there is no provision for UGRArepresentation on any committees for benefits.Nancy Sullivan explained that the cost ofbenefits to the University is going up 10percent per year because of increased planutilization, the rapidly escalating cost ofprescription drugs, and OHIP’s delisting ofsome services such as coverage for visits tooptometrists and chiropractors. UGRA

3. COMPETITIVE POSITIONThe UGRA is aware that the University

of Guelph regards certain other sisterinstitutions as its major source ofcompetition in the markets for labourservices for employees such as faculty,librarians and professional staff. A quicksurvey of inflation adjustment policies ofsister institutions with defined benefitsplans elicited the following information.(In point form for purposes of brevity.)

McMaster University• Inflation protection depends on the

pension fund’s five year average netearning being greater than 4.5%.Retirees receive those excess earnings orthe rate of inflation, whichever is lower.Excess earnings above the inflation ratecan be used to retroactively adjust forprevious years shortfalls.

• Experience over the years 1998-2005,the average annual rate of inflation (theway McMaster calculates it) was 2.26%.Corresponding inflation adjustmentswere 1.12% or 49.7% of measuredinflation. The deficiency was therefore1.14%, or roughly 50.3% of measuredinflation.

University of Toronto• 0.75CPI with University of Toronto

Faculty Association negotiating for theremaining 25% so that 100%compensation for inflation is achieved.

• Experience over the years 1999-2006:100% compensation. The TorontoAdministration initially refused toaugment the 0.25CPI, but theseadjustments have been wonsubsequently though arbitration.

University of Waterloo• Fully indexed up to 5%. Inflation above

5% covered if affordable. Subsequently,any inflation not covered becomes toppriority in use of surplus.

• Experience over the years 1999-2006:Full compensation for inflation.In summary, Guelph’s inflation

adjustment experience is fourth out offour in our survey. Waterloo and Torontoare providing full compensation forinflation. McMaster is only marginallybetter than Guelph but it has a formalmechanism for making retroactiveadjustments so that retirees may havesome confidence about future outcomes.

Guelph is at a competitivedisadvantage in terms of maintainingpurchasing power of post retirementincome vis a vis its major competitorswith defined benefit plans.

UGRA’s formal understanding of thelack of recent ad hoc inflationadjustments at the University is basedupon President Summerlee’s letter toUGRA dated June 7, 2006. Simply stated,in his view the plans cannot afford suchadjustments. This situation is due to

“market conditionsespecially the very lowinterest rates that mustbe used in thecalculation of fundingrequirements under thecurrent provincialpension regulations.”

President Summerleeprovided the precedingexplanation in thecontext of a planvaluation which

“…must be done asat September 30, 2006.

When the valuation is completed it isestimated currently that the solvencydeficits on the two major open plans(Retirement and Professional) will be ashigh as $150 million….As a result, it isestimated that the University will berequired to contribute $40 million in the2006/2007 pensions years, withpotentially similar levels of contributionsthe following three to five yearsdepending on future market conditions.”

The Universities of Toronto andWaterloo presumably faced similar“market conditions” to those faced by theUniversity of Guelph, including low longterm interest rates. This leads us to askwhat else may have given rise to Guelph’ssolvency deficiencies. The University’spractice during the 1990’s of pensioncontribution holidays may be acontributing factor in the failure toprovide full inflation protection.

Whatever the reason, it is UGRA’s viewthat the University should immediatelytake action so that our pension plans do

not impose the economic hardships andthe competitive disadvantages discussedearlier in this brief, associated with thetwo per cent deductible formula.

4. RECOMMENDATIONS(a) Immediate: It is urgent to make atleast a partial ad hoc “good faith”adjustment in 2007 even if this results insome slight, incipient increase in thecurrent solvency deficiency of the pensionplans.

(b) Longer Term: UGRA recommendsthat a committee be struck by theAdministration to investigate how thecurrent policy of ad hoc inflationadjustments can be improved so thatretirees are not burdened with acontinuing fall of 2% per year in theirpensions indefinitely into the future. Thisshould include recommendations forproviding retroactive payments to makeup for the fall in the real values ofpensions since 2001. UGRA would lookforward to having a representative onsuch a committee.

As part of this study, University ofGuelph should consider adopting aninflation adjustment formula similar tothat currently in place at the University ofWaterloo. This may require changes inexisting pension plan provisions toreduce the cost and increase the fundingof the plans while, for example,progressively reducing the deductible tozero over time. The objectives are toprovide real dollar pension certainty forGuelph retirees while simultaneouslymaking the University more competitivein labour markets and simplifying greatlythe process and administration ofinflation adjustments.

Alternatively, some type of excessearnings mechanism may facilitate futuread hoc adjustments which would makethe adoption of a Waterloo type offormula unnecessary. In its 1991, “BriefTo The Task Force on Pensions”, theUGRA suggested a scheme showing howthese ad hoc adjustments could be fundedand become almost automatic in thefuture – effectively a full CPI policy.

The University’s experience from 1992to 1998 shows that the current formulacan work well. The adoption of a totallynew scheme may not be necessary. Forinstance, coupled with relatively minorchanges to the pensions’ plans provisions,perhaps the timing of the ad hocadjustments should be changed from oneyear to an average rate of adjustment overa period of two or three years. UGRA

(This Brief was prepared by the Pensions Committee ofUGRA and approved by the full Board of UGRA)

Continued from page 5.

COMMUNICATIONS WITH RETIREESAs issues arise, the Executive of UGRA would like to solicit your views and concerns. To do this, we need to know either your mailing

and/or email addresses. Unfortunately, the University Administration, because of perceived confidentiality reasons, will not provide thisinformation directly to us. Accordingly, they send the Newsletter directly to you.

Please consider adding your mailing and/or email addresses to the form below when you make a membership donation by mail to

University of Guelph Retirees Association, University of Guelph, N1G 2W1. Alternatively, you might email ugra@uoguelph.ca. UGRA

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

SUMMARYThe University of Guelph Retirees

Association (UGRA) is extremelyconcerned about the loss of value in thepensions received from the University ofGuelph by its retirees. We estimate thisloss to be in excess of 9 percent over theyears 2002 to 2006. If the BoardCommittee takes no action in 2007, thecumulative loss will be close to 11%.

This situation is due to the inadequacyof the formula for inflation protectioncurrently embedded in the University’spension plans which does not require theplans to provide adjustments for the firsttwo percentage points of CPI inflation.The formula was originally adopted withthe expectation that this “deductible”would normally be funded annually on apay as you go basis. Since 2001, this payas you go approach has not worked. Awillingness on the part of the BoardCommittee to let pension incomesannually erode by two per cent hasallowed an unfortunate situation to arisewhich is creating hardships for retireesand is adversely affecting the University’sreputation as an institution that caresabout its retired employees.

Our objective is to bring this situationto the attention of the Board Committeeand to offer some thoughts on how theUniversity’s approach to inflationprotection might be improved in thefuture. At a minimum, an immediate(2007) full or partial “good faith”adjustment is recommended. The BoardCommittee should also considerestablishing a process to change thepension plans so that full inflationprotection is provided in the future.

1. INTRODUCTIONThe University of Guelph Retirees

Association (UGRA) wishes to bring tothe attention of the UniversityAdministration, its Board of Governorsand the Board Committee on Pensionsand Benefits a serious problem inpayment of pensions that has beenemerging since 1999 at this University.

UGRA’s interest in the issue of inflationprotection is not new. As long ago as1991, it urged the University to give toppriority to better inflation protection ofpensions.

“There is a growing dissatisfaction

among retired employees with currentpensions because of inadequateadjustment for inflation. Most retireesbelieve their pensions should be correctedto something much closer to the full levelof C.P.I. increases. The majority considerit should be full C.P.I. indexing. Theprinciple of inflation protection is and hasbeen applied to current Universityemployees, and retired employees fail tounderstand why they should not betreated in the same manner.”(UGRA,“Brief To The Task Force on Pensions”,December 10, 1991, p.1)

At that time the indexation provision(or formula) of the pensions plansprovided for automatic compensation forannual increases in the Consumer PriceIndex greater than three percent –subsequently improved to 2%. It wasunderstood that fully funding (therebyguaranteeing payment of) the 2%deductible was expensive - the amount ofpension fund surplus required to do thiswas considerable – so that 2%adjustments should be made on a muchcheaper ad hoc, pay as you go, annualbasis. An annual recommendation of thePension and Benefits Committee of theBoard was required for all or part of these2% adjustments to be paid to the retirees.

UGRA was thus very pleased when theAdministration put in practice fullinflation protection (that is, both theautomatic and ad hoc components werepaid) over the years 1992 through to1998.Retirees and those approachingretirement (and especially employeesconsidering early retirement) reasonablycame to expect full inflation protection.However, this practise started changing in1999. Since 2002 the Administration,and, on its recommendation, the BoardCommittee, has not permitted thepension plans to fund the 2% deductible.

In 2003, concerned over this apparentshift in inflation protection practice, theUGRA reiterated the importance ofpursuing full inflation protection to theAdministration.

“A major concern for all retirees is thattheir pension should not suffer frominflation, leading to erosion of purchasingpower and a decline in lifestyle whichcould be quite devastating over aprolonged period. This was the primarymotivation for the formation of UGRA in

1991, and continues to be an importantfactor. This is consistent withRecommendation C1 of the “Final Reportof the Presidential Task Force onPensions” (June 3, 1992) which states“Annual inflation adjustments be givenfirst claim on surplus”.” (UGRA,“Position Paper on Pensions’, December07, 2003)

UGRA believes that not funding the 2%deductible is already causing considerableharm to the economic well being of theUniversity’s retirees. It is not alone in thisappreciation. No less an august body thanCanada’s central bank, the Bank ofCanada, has recently addressed thisgeneral issue.

“A 2 per cent rate of inflation causesthe price level to double approximatelyevery 35 years. Although the erosion inpurchasing power is difficult to noticeyear by year, it can still pose a seriousproblem on a cumulative basis. Thiserosion is particularly acute for thosepensioners on a fixed income.” (Bank ofCanada, “Renewal of the Inflation ControlTarget”, November 2006, p. 10)

2. RECENT INFLATION COMPENSATION OFEMPLOYEE PENSIONS AT THE UNIVERSITYOF GUELPH

The following table compares recentinflation to inflation adjustmentsmandated by the pension plans’ formulaof CPI – 2% along with ad hocadjustments arising from partial or fulldiscretionary compensation for the 2%deductible.

The uncompensated shortfall ordifference is over half, 52.6%, of measuredinflation over the past eight years.However, this erosion of retiree pensionsat Guelph has been particularly severeover the past five years. Since 2002,retirees have absorbed 77% of totalmeasured inflation and 88% of thecumulative loss associated with the 2%deductible. Compared to an initialpension value in 2001, by the end of2006, the real purchasing power of aUniversity of Guelph retiree’s pension was9.3% less than if the pension had beenfully protected from inflation over theintervening five years. While this imposesan economic loss on all retirees, formeremployees receiving modest Guelphpensions are particularly hard hit.

5UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter4

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

UNIVERSITY OF GUELPH RETIREES ASSOCIATIONBRIEF TO THE PENSIONS AND BENEFITS COMMITTEEOF THE BOARD OF GOVERNORS(The following document was sent to members of the Pensions and Benefits Committee of the Board of Governors of theUniversity for consideration at their May 18 meeting. It was prepared by the Pensions Committee of UGRA - John Benson,Roger Hacker and Dave Hull (Chair) and approved by the full Board of UGRA.)

The concern of UGRA is not simply thedeleterious impact that the “shortfall” hasin any one year, but, as implied by theBank of Canada, the insidious cumulativeimpact of a 2% annual loss of purchasingpower over many years.

Since the Bank of Canada’s targetedaverage annual rate of inflation is 2%,the deductible formula holds for retireesthe unfortunate prospect of their havingto cope on average with all of theinflation Canada experiences for the

foreseeable future. The University ofGuelph will have an inflation protectionformula which effectively provides noprotection against ongoing, averageannual 2% inflation over the longerterm.

The chart shown on the following pagetracks the losses associated with a pensioninitially valued at $20,000 at the end of1998 though to the year 2016. Applyingthe actual adjustments received byUniversity retirees between 1999 and

2006 shown in the previous Table, it canbe seen that the $20,000 1998 pensionwas $6,627 less in 2006 than if fullinflation coverage had been received.Another way of looking at this is that, by2016, the purchasing power of Universityof Guelph pension income will havedecreased to 75% of that in 2002. Theeffect on pensioners with fixed incomes isclearly disastrous.

In 10 years, by 2016, the totalcumulative shortfall will be $55,000should the University not permit the 2%deductible to be made up on an ad hocbasis – a tremendous loss of pensionincome over time. The cumulative lossover this ten year period would amount tomore than two and a half times a full yearspension income in 2006. Using an initialpension of $40,000, the loss of wealthwould be proportionately higher,$110,000.

This example demonstrates that thereis a serious problem with the lack of fullinflation protection for pensioners of theUniversity of Guelph since 1999.Remedial action is required toretroactively restore real pension valuesand future action is required, in 2007, tofund all or part of the 2% deductible.

RECENT GUELPH PENSION INFLATION ADJUSTMENTS (IN %)Formula Augmented “Shortfall”

CPI (Required) Increase Discretionary UncompensatedYear Inflation Rate (CPI – 2%) Ad Hoc Adjustment Difference1992-1998 (Full inflation protection)1999 1.01 0 0.5* 0.512000 2.23 0.23 2.0 0.02001 2.88 0.88 2.0** 0.02002 2.07 0.07 0.0 2.02003 3.08 1.08 0.0 2.02004 1.76 0.0 1.0 0.762005 2.21 0.21 0.0 2.02006 2.30 0.30 0.0 2.0* Made retroactively in 2000 ** Made retroactively in 2002Source: 1999 – 2004: Human Resources Department, University of Guelph,; 2005-2006: Letters to Retirees.

Continued on page 6.

SUMMARYThe University of Guelph Retirees

Association (UGRA) is extremelyconcerned about the loss of value in thepensions received from the University ofGuelph by its retirees. We estimate thisloss to be in excess of 9 percent over theyears 2002 to 2006. If the BoardCommittee takes no action in 2007, thecumulative loss will be close to 11%.

This situation is due to the inadequacyof the formula for inflation protectioncurrently embedded in the University’spension plans which does not require theplans to provide adjustments for the firsttwo percentage points of CPI inflation.The formula was originally adopted withthe expectation that this “deductible”would normally be funded annually on apay as you go basis. Since 2001, this payas you go approach has not worked. Awillingness on the part of the BoardCommittee to let pension incomesannually erode by two per cent hasallowed an unfortunate situation to arisewhich is creating hardships for retireesand is adversely affecting the University’sreputation as an institution that caresabout its retired employees.

Our objective is to bring this situationto the attention of the Board Committeeand to offer some thoughts on how theUniversity’s approach to inflationprotection might be improved in thefuture. At a minimum, an immediate(2007) full or partial “good faith”adjustment is recommended. The BoardCommittee should also considerestablishing a process to change thepension plans so that full inflationprotection is provided in the future.

1. INTRODUCTIONThe University of Guelph Retirees

Association (UGRA) wishes to bring tothe attention of the UniversityAdministration, its Board of Governorsand the Board Committee on Pensionsand Benefits a serious problem inpayment of pensions that has beenemerging since 1999 at this University.

UGRA’s interest in the issue of inflationprotection is not new. As long ago as1991, it urged the University to give toppriority to better inflation protection ofpensions.

“There is a growing dissatisfaction

among retired employees with currentpensions because of inadequateadjustment for inflation. Most retireesbelieve their pensions should be correctedto something much closer to the full levelof C.P.I. increases. The majority considerit should be full C.P.I. indexing. Theprinciple of inflation protection is and hasbeen applied to current Universityemployees, and retired employees fail tounderstand why they should not betreated in the same manner.”(UGRA,“Brief To The Task Force on Pensions”,December 10, 1991, p.1)

At that time the indexation provision(or formula) of the pensions plansprovided for automatic compensation forannual increases in the Consumer PriceIndex greater than three percent –subsequently improved to 2%. It wasunderstood that fully funding (therebyguaranteeing payment of) the 2%deductible was expensive - the amount ofpension fund surplus required to do thiswas considerable – so that 2%adjustments should be made on a muchcheaper ad hoc, pay as you go, annualbasis. An annual recommendation of thePension and Benefits Committee of theBoard was required for all or part of these2% adjustments to be paid to the retirees.

UGRA was thus very pleased when theAdministration put in practice fullinflation protection (that is, both theautomatic and ad hoc components werepaid) over the years 1992 through to1998.Retirees and those approachingretirement (and especially employeesconsidering early retirement) reasonablycame to expect full inflation protection.However, this practise started changing in1999. Since 2002 the Administration,and, on its recommendation, the BoardCommittee, has not permitted thepension plans to fund the 2% deductible.

In 2003, concerned over this apparentshift in inflation protection practice, theUGRA reiterated the importance ofpursuing full inflation protection to theAdministration.

“A major concern for all retirees is thattheir pension should not suffer frominflation, leading to erosion of purchasingpower and a decline in lifestyle whichcould be quite devastating over aprolonged period. This was the primarymotivation for the formation of UGRA in

1991, and continues to be an importantfactor. This is consistent withRecommendation C1 of the “Final Reportof the Presidential Task Force onPensions” (June 3, 1992) which states“Annual inflation adjustments be givenfirst claim on surplus”.” (UGRA,“Position Paper on Pensions’, December07, 2003)

UGRA believes that not funding the 2%deductible is already causing considerableharm to the economic well being of theUniversity’s retirees. It is not alone in thisappreciation. No less an august body thanCanada’s central bank, the Bank ofCanada, has recently addressed thisgeneral issue.

“A 2 per cent rate of inflation causesthe price level to double approximatelyevery 35 years. Although the erosion inpurchasing power is difficult to noticeyear by year, it can still pose a seriousproblem on a cumulative basis. Thiserosion is particularly acute for thosepensioners on a fixed income.” (Bank ofCanada, “Renewal of the Inflation ControlTarget”, November 2006, p. 10)

2. RECENT INFLATION COMPENSATION OFEMPLOYEE PENSIONS AT THE UNIVERSITYOF GUELPH

The following table compares recentinflation to inflation adjustmentsmandated by the pension plans’ formulaof CPI – 2% along with ad hocadjustments arising from partial or fulldiscretionary compensation for the 2%deductible.

The uncompensated shortfall ordifference is over half, 52.6%, of measuredinflation over the past eight years.However, this erosion of retiree pensionsat Guelph has been particularly severeover the past five years. Since 2002,retirees have absorbed 77% of totalmeasured inflation and 88% of thecumulative loss associated with the 2%deductible. Compared to an initialpension value in 2001, by the end of2006, the real purchasing power of aUniversity of Guelph retiree’s pension was9.3% less than if the pension had beenfully protected from inflation over theintervening five years. While this imposesan economic loss on all retirees, formeremployees receiving modest Guelphpensions are particularly hard hit.

5UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter4

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

UNIVERSITY OF GUELPH RETIREES ASSOCIATIONBRIEF TO THE PENSIONS AND BENEFITS COMMITTEEOF THE BOARD OF GOVERNORS(The following document was sent to members of the Pensions and Benefits Committee of the Board of Governors of theUniversity for consideration at their May 18 meeting. It was prepared by the Pensions Committee of UGRA - John Benson,Roger Hacker and Dave Hull (Chair) and approved by the full Board of UGRA.)

The concern of UGRA is not simply thedeleterious impact that the “shortfall” hasin any one year, but, as implied by theBank of Canada, the insidious cumulativeimpact of a 2% annual loss of purchasingpower over many years.

Since the Bank of Canada’s targetedaverage annual rate of inflation is 2%,the deductible formula holds for retireesthe unfortunate prospect of their havingto cope on average with all of theinflation Canada experiences for the

foreseeable future. The University ofGuelph will have an inflation protectionformula which effectively provides noprotection against ongoing, averageannual 2% inflation over the longerterm.

The chart shown on the following pagetracks the losses associated with a pensioninitially valued at $20,000 at the end of1998 though to the year 2016. Applyingthe actual adjustments received byUniversity retirees between 1999 and

2006 shown in the previous Table, it canbe seen that the $20,000 1998 pensionwas $6,627 less in 2006 than if fullinflation coverage had been received.Another way of looking at this is that, by2016, the purchasing power of Universityof Guelph pension income will havedecreased to 75% of that in 2002. Theeffect on pensioners with fixed incomes isclearly disastrous.

In 10 years, by 2016, the totalcumulative shortfall will be $55,000should the University not permit the 2%deductible to be made up on an ad hocbasis – a tremendous loss of pensionincome over time. The cumulative lossover this ten year period would amount tomore than two and a half times a full yearspension income in 2006. Using an initialpension of $40,000, the loss of wealthwould be proportionately higher,$110,000.

This example demonstrates that thereis a serious problem with the lack of fullinflation protection for pensioners of theUniversity of Guelph since 1999.Remedial action is required toretroactively restore real pension valuesand future action is required, in 2007, tofund all or part of the 2% deductible.

RECENT GUELPH PENSION INFLATION ADJUSTMENTS (IN %)Formula Augmented “Shortfall”

CPI (Required) Increase Discretionary UncompensatedYear Inflation Rate (CPI – 2%) Ad Hoc Adjustment Difference1992-1998 (Full inflation protection)1999 1.01 0 0.5* 0.512000 2.23 0.23 2.0 0.02001 2.88 0.88 2.0** 0.02002 2.07 0.07 0.0 2.02003 3.08 1.08 0.0 2.02004 1.76 0.0 1.0 0.762005 2.21 0.21 0.0 2.02006 2.30 0.30 0.0 2.0* Made retroactively in 2000 ** Made retroactively in 2002Source: 1999 – 2004: Human Resources Department, University of Guelph,; 2005-2006: Letters to Retirees.

Continued on page 6.

3UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter6

UGRA EXECUTIVE COMMITTEEMEETS WITH PRESIDENTSUMMERLEE AND VICE-PRESIDENT SULLIVANTed Burnside, who chaired the meeting,

welcomed and thanked the President andVice President for attending the UGRA Boardmeeting.

Our guests were informed that the UGRABoard would be tabling a brief for submissionto the Board of Governors Pens & BensCommittee. Since 1999 inflation protection forUniversity of Guelph retirees has deteriorated.Over 9% of the 1999 purchasing power hasbeen lost due to failure of the University tomake ad hoc adjustments. This problem willonly get worse if no retroactive adjustmentsare made and if the 2% deductible issue is notaddressed. In fact if this situation is notremedied soon it will be very costly and nearlyimpossible for the University to bring pensionsback to full purchasing power.

The President responded that the situationis not what he would wish. Adverse marketconditions, low long-term interest rates, andthe solvency deficit have not helped thepension fund and, therefore, the University isnot in a position to make ad hoc adjustments.If the solvency wind-up issue was addressedby the Province an ad hoc adjustment mightthen be possible.

Comparisons of inflation adjustmentpolicies of sister institutions with definedpension plans were made. The University ofGuelph is at a distinct disadvantage whenhiring or retaining employees, compared toWaterloo, Toronto, and even McMaster, whichhas provision for making retroactive ad hocadjustments to pensions while the other twosister Universities have had full pensionprotection in recent times. PresidentSummerlee said that research has shown thatpost-retirement income is not a majorconsideration for prospective employees.

It was also pointed out that CPI minus 2%might have seemed like inflation protectionwhen inflation was 5% or more, but that since2000 with inflation at about 2% and withGovernment policies to keep it at that level,the existing pensions have little or no inflationprotection.

It was stressed that for all retireesdeteriorating pensions is a very seriousproblem and many pensioners are facinghardship. The President understood ourconcern, but pointed out that the projectedbudget deficit of $15,000,000, the solvencyrequirement of $31,000,000/year over the nextthree years, the anticipated 6 per centoperating cost increase with only a 0.5 per centincrease in provincial funding have putunprecedented demands on University funds.Employee groups, retirees, students are allvoicing their needs. He does not see ad hocadjustment for a very long time. If the planscould afford it, the administration would makead hoc adjustments a top priority.

Nancy Sullivan stated that the Province hasannounced the establishment of a commissionto examine defined benefit pension plans.There are seven universities in the Provincewith defined benefit plans and COU will bemaking a presentation. Unfortunately thereport will not be completed until summer2008.

It was pointed out that an ad hocadjustment is a minor expenditure comparedto the very sizeable demands placed on theUniversity, for pension fund solvencyadjustment. The cost for a one-year ad hocadjustment was estimated between $2,000,000and $4,000,000. The President said that if theUniversity were to fund an ad hoc adjustmentfor its retirees at this time it would undercutthe argument the University is making to thegovernment for relief from the current pensionsolvency rules. The question was raised whythe University was opting to pay the solvencyrequirement in three years when thegovernment has granted the University fiveyears to do so.

President Summerlee recommended that ifthe solvency issue were to be removed, weshould then spend time thinking about thedesign of our pension plan and contributionrates, keeping in mind the University’schallenge of falling revenues and increasingcosts.

The President asked the Executive how theUniversity could satisfy UGRA’s concerns.Several suggestions were made:• It would be helpful to have a statement that

would define the position of theadministration on ad hoc increases, and animmediate ad hoc increase would be the bestsignal that the University could possiblysend that it is deeply aware of our concernsfor all pensioners.

• UGRA would like to play a role in any futurepension plan review.

• A successor to ACPB should be formed toevaluate the possibility of ad hocadjustments.

• The retiree representative on the Pensions &Benefits Committee of the Board ofGovernors should be formally appointed byUGRA. We would then have moremeaningful representation.

Benefits issues were then discussed. It wasreported that the Benefits Sub-committee hadreviewed our Retiree Group Insurance BenefitsPlan and compared it with those at otheruniversities. The most significant difference issemi-private hospital room coverage, which islimited to 180 days at the University of Guelphand one other university. All other universitieshave unlimited coverage. The coverage forhearing aids is only $300 over a period of 5years which is very low considering their cost.It is difficult to negotiate for improvements,since there is no provision for UGRArepresentation on any committees for benefits.Nancy Sullivan explained that the cost ofbenefits to the University is going up 10percent per year because of increased planutilization, the rapidly escalating cost ofprescription drugs, and OHIP’s delisting ofsome services such as coverage for visits tooptometrists and chiropractors. UGRA

3. COMPETITIVE POSITIONThe UGRA is aware that the University

of Guelph regards certain other sisterinstitutions as its major source ofcompetition in the markets for labourservices for employees such as faculty,librarians and professional staff. A quicksurvey of inflation adjustment policies ofsister institutions with defined benefitsplans elicited the following information.(In point form for purposes of brevity.)

McMaster University• Inflation protection depends on the

pension fund’s five year average netearning being greater than 4.5%.Retirees receive those excess earnings orthe rate of inflation, whichever is lower.Excess earnings above the inflation ratecan be used to retroactively adjust forprevious years shortfalls.

• Experience over the years 1998-2005,the average annual rate of inflation (theway McMaster calculates it) was 2.26%.Corresponding inflation adjustmentswere 1.12% or 49.7% of measuredinflation. The deficiency was therefore1.14%, or roughly 50.3% of measuredinflation.

University of Toronto• 0.75CPI with University of Toronto

Faculty Association negotiating for theremaining 25% so that 100%compensation for inflation is achieved.

• Experience over the years 1999-2006:100% compensation. The TorontoAdministration initially refused toaugment the 0.25CPI, but theseadjustments have been wonsubsequently though arbitration.

University of Waterloo• Fully indexed up to 5%. Inflation above

5% covered if affordable. Subsequently,any inflation not covered becomes toppriority in use of surplus.

• Experience over the years 1999-2006:Full compensation for inflation.In summary, Guelph’s inflation

adjustment experience is fourth out offour in our survey. Waterloo and Torontoare providing full compensation forinflation. McMaster is only marginallybetter than Guelph but it has a formalmechanism for making retroactiveadjustments so that retirees may havesome confidence about future outcomes.

Guelph is at a competitivedisadvantage in terms of maintainingpurchasing power of post retirementincome vis a vis its major competitorswith defined benefit plans.

UGRA’s formal understanding of thelack of recent ad hoc inflationadjustments at the University is basedupon President Summerlee’s letter toUGRA dated June 7, 2006. Simply stated,in his view the plans cannot afford suchadjustments. This situation is due to

“market conditionsespecially the very lowinterest rates that mustbe used in thecalculation of fundingrequirements under thecurrent provincialpension regulations.”

President Summerleeprovided the precedingexplanation in thecontext of a planvaluation which

“…must be done asat September 30, 2006.

When the valuation is completed it isestimated currently that the solvencydeficits on the two major open plans(Retirement and Professional) will be ashigh as $150 million….As a result, it isestimated that the University will berequired to contribute $40 million in the2006/2007 pensions years, withpotentially similar levels of contributionsthe following three to five yearsdepending on future market conditions.”

The Universities of Toronto andWaterloo presumably faced similar“market conditions” to those faced by theUniversity of Guelph, including low longterm interest rates. This leads us to askwhat else may have given rise to Guelph’ssolvency deficiencies. The University’spractice during the 1990’s of pensioncontribution holidays may be acontributing factor in the failure toprovide full inflation protection.

Whatever the reason, it is UGRA’s viewthat the University should immediatelytake action so that our pension plans do

not impose the economic hardships andthe competitive disadvantages discussedearlier in this brief, associated with thetwo per cent deductible formula.

4. RECOMMENDATIONS(a) Immediate: It is urgent to make atleast a partial ad hoc “good faith”adjustment in 2007 even if this results insome slight, incipient increase in thecurrent solvency deficiency of the pensionplans.

(b) Longer Term: UGRA recommendsthat a committee be struck by theAdministration to investigate how thecurrent policy of ad hoc inflationadjustments can be improved so thatretirees are not burdened with acontinuing fall of 2% per year in theirpensions indefinitely into the future. Thisshould include recommendations forproviding retroactive payments to makeup for the fall in the real values ofpensions since 2001. UGRA would lookforward to having a representative onsuch a committee.

As part of this study, University ofGuelph should consider adopting aninflation adjustment formula similar tothat currently in place at the University ofWaterloo. This may require changes inexisting pension plan provisions toreduce the cost and increase the fundingof the plans while, for example,progressively reducing the deductible tozero over time. The objectives are toprovide real dollar pension certainty forGuelph retirees while simultaneouslymaking the University more competitivein labour markets and simplifying greatlythe process and administration ofinflation adjustments.

Alternatively, some type of excessearnings mechanism may facilitate futuread hoc adjustments which would makethe adoption of a Waterloo type offormula unnecessary. In its 1991, “BriefTo The Task Force on Pensions”, theUGRA suggested a scheme showing howthese ad hoc adjustments could be fundedand become almost automatic in thefuture – effectively a full CPI policy.

The University’s experience from 1992to 1998 shows that the current formulacan work well. The adoption of a totallynew scheme may not be necessary. Forinstance, coupled with relatively minorchanges to the pensions’ plans provisions,perhaps the timing of the ad hocadjustments should be changed from oneyear to an average rate of adjustment overa period of two or three years. UGRA

(This Brief was prepared by the Pensions Committee ofUGRA and approved by the full Board of UGRA)

Continued from page 5.

COMMUNICATIONS WITH RETIREESAs issues arise, the Executive of UGRA would like to solicit your views and concerns. To do this, we need to know either your mailing

and/or email addresses. Unfortunately, the University Administration, because of perceived confidentiality reasons, will not provide thisinformation directly to us. Accordingly, they send the Newsletter directly to you.

Please consider adding your mailing and/or email addresses to the form below when you make a membership donation by mail to

University of Guelph Retirees Association, University of Guelph, N1G 2W1. Alternatively, you might email ugra@uoguelph.ca. UGRA

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

UGRA • UNIVERSITY OF GUELPH RETIREES ASSOCIATION • MEMBERSHIP SUPPORT FORM

Membership Year: April 1 to March 31

YES! I want to promote the welfare of retirees and to help UGRA foster a mutually beneficial relationship with the University of Guelph. Please accept my cheque for $20 as a contribution to assist with administration.

NAME:

ADDRESS:

CITY/PROVINCE: POSTAL CODE:

EMAIL:

I would like to receive more information about serving on the Executive of UGRA or on one of itscommittees. I can be reached by telephone at:

Please make the cheque payable to: UNIVERSITY OF GUELPH RETIREES ASSOCIATION Mail this form with your cheque to: UNIVERSITY OF GUELPH RETIREES ASSOCIATION

UNIVERSITY OF GUELPHGUELPH, ONTARIO • N1G 2W1

✃

7UGRA Spring 2007 NewsletterUGRA Spring 2007 Newsletter2

U n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n N e w s l e t t e r

THIRD AGELEARNING FALL

PROGRAMThis fall Third Age Learning – Guelph will

resume its lecture series as its 39th seasonbegins. The two series of continuing educationlectures are intended for retired people in theGuelph and area community. All sessions areheld at the Arboretum Centre on campuswhere there is ample free parking.

The morning lectures will run from 10:00a.m. – 12:00 noon and the afternoon lecturesfrom 1:30 – 3:30. Each course costs $30.00.

The two topics for the fall 2007 season willbe China, the Next Superpower andPhilosophers, Eastern and Western. There willbe a series of 8 lectures in each topic; the list oftitles and speakers is still in preparation.

Further information and registration formswill be available from the third age learning web site at

www.thirdagelearningguelph.ca UGRA

LIST OF RETIREESRETIREES SINCE FEBRUARY 1, 2007

NAME DEPARTMENTCal Swegles Human Resources

Howard Swatland Animal & Poultry Science

Tim Sauer Library

Karen Walker Special Services

NAME DEPARTMENTDana Paramskas Languages & Literatures

Douglas Dalgleish Food Science

Margaret Shaw Hospitality and Tourism Management

Barbara Funk Counselling

Iwish in this, my last report, I hadbetter news to share, but as you will

learn later, that is not the case.President Summerlee and VP –

Finance & Administration NancySullivan met UGRA Executive at ourFebruary meeting. As I was in Ottawa Idid not attend. Ted Burnside, UGRA

Vice President chaired the meeting in my place.We have been more aggressive in our relations with the

University this year, commencing with this meeting andcontinuing in subsequent correspondence. This change in ourstyle drew clear and frank replies. The University does notrecognize UGRA as the exclusive representative of Universityretirees. They do not intend to negotiate with UGRA. They willcontinue to consult with us, meet with us and shareinformation.

Most of our energy this year focused on two briefs, ourPension brief and our Benefits brief. Our Pension brief containsa strong, detailed chronicle of the diminished income ourmembers experienced as a result of a failure by the Universityto provide ad hoc adjustments needed to protect our membersfrom inflation. The brief also contains unfavourablecomparisons between how University of Guelph retirees aretreated when compared to those at other universities in ourregion. And finally, it makes recommendations to redress thisproblem. The Brief will be presented to the University’sPension and Benefits Committee May meeting.

Our Benefits brief outlines deficiencies in current coverage,identifies other universities where coverage is better and offersrecommendations to improve our own benefits.

Unfortunately our briefs are coming forward during aclimate of extreme financial challenges facing the University.Last week, President Summelee announced that theUniversity’s budget is in a “devastating” deficit ofapproximately $ 20,000,000. As well, the recent evaluation ofthe pension funds reveals it to also be in large deficit position.While we may challenge the University’s priorities and pastmanagement choices, the University’s decisions on retirees’requests for improved pensions and benefits will be made inthe reality of current financial conditions.

More unwelcome news comes in the form of increases inHealth and Dental premium to take effect in May. Because theUniversity’s share of these premiums is 70% for health and 50%for dental premiums I assume they negotiated hard to obtainthe best deal available. But still, it is a burden imposed on uswithout increases in income.

On a positive note, the situation of an UGRA member andspouse who were subjected to poor treatment by Sun Life’sItalian representatives responsible for providing assistance andinformation to retirees who become ill or injured whiletraveling abroad was resolved to the satisfaction of the retiree.The retiree’s vigorous and competent pursuit for justice in thissituation has produced changes that will benefit retireestraveling abroad in the future. The retiree in this case may writea submission for our Fall newsletter outlining the case so thatother retirees may be guided in the event they may be exposedto similar circumstances.

As well, we have worked closely with the Universitybargaining groups, which includes the Faculty Association,attended the Stakeholders’ meetings and addressed over 500staff at a Town Hall meeting where we stated our displeasure

with the University’s treatment of retirees pension benefits. Last June, when I accepted the Presidency, I promised to

focus my efforts on our single most important concern, ourpension benefits. I and our executive devoted many hoursduring the past year to this issue. We gave the attention andhard work needed to produce a brief that provides acompelling case for improved pension benefits to retirees.

While it has been a busy period for me as President, otherUGRA members devoted generous amount of time and energyon behalf of all retirees. Our new members gave our executivefresh “legs”, ideas and valuable knowledge and insights.

Sally Stoddard provided outstanding support throughout theyear by giving us detailed minutes on a timely basis. Oftenthese minutes were complicated and very long. Sally alsoensured we had agendas well in advance of our meetings. Sally,I appreciated your support very much. Thank you.

As chair of our Pension Committee and a member of theUniversity’s Pens & Bens Committee, David Hull workeddiligently to ensure, along with his committee members JohnBenson, Dale Lockie and Roger Hacker that our brief onpensions was completed, discussed, approved and submittedon time to the Pens & Bens committee.

Our Treasurer, Pat Hoare provided us with the financialinformation we needed to ensure we could conduct ourbusiness, continue our newsletters and honour our scholarshipcommitments. She had to make many trips to the University tocollect our mail and make numerous trips to our bank todeposit your fees.

Wayne Marsh, our Past President, assumed responsibility forproducing our three newsletters. Discharging thatresponsibility required a significant time commitment whichhe willingly gave. As well, he chaired our NominatingCommittee.

Bruce Koenig kept our Web Site current, Carolyn Pawleymonitored our scholarship program and Ken Grant agreed toexplore ways of increasing the number of active UGRAmemberships.

Gil Stetler assisted Ted on the Benefits Committee.I think we have had a successful year in that we

accomplished what we set out to do. And, although ourrelations with the University have eroded slightly, at least theyand we have a clear and unambiguous understanding of ourpositions on various topics. I hope our brief to the UniversityPension and Benefits Committee will result in positiveoutcomes.

And finally, I’d like to acknowledge the very hard work thatour Vice President Ted Burnside has done this past year. He ischair of our benefits committee but beyond that he has been aconsistent participant at the Stakeholders meetings, a veryactive executive member and a constant support to me. Ivalued his counsel and suggestions. He will be an effectivepresident and leader of UGRA in 2007 – 2008.

In closing, I encourage you to plan on attending our AnnualGeneral Meeting in June which takes place in the morningbefore the President’s Luncheon for retirees. Please considerbecoming actively involved with your executive and as I havein the past I urge you to become a fee paying member of UGRA.

Have a wonderful Summer. UGRA

Allan McInnis CAPresident – UGRA – 2006 - 2007

PRESIDENT’S MESSAGE

Al McInnis

Your IncomingPresident for

2007-2008 is Dr.Ted Burnside, a

resident of Fergus with his wife Laurene.Ted served on the faculty of the OAC inthe Department of Animal and PoultryScience from 1964 through 1994, as aProfessor and Founding Director of theCentre for Genetic Improvement ofLivestock. He then served a 4-year termas VP Academic at the NSAC Truro,Nova Scotia, followed by a 4-year termas Senior Geneticist at Semex Alliance.He continues to consult in AnimalGenetics with Gencor, Guelph, andGeno Global, a Norwegian CattleBreeding Company. Ted was a CivilServant before moving onto the

University of Guelph Faculty in 1965.Ted comments on those happenings 42years ago. “They told us we would neverbe disadvantaged by joining on asfaculty at Guelph, vis-à-vis being anemployee of the Government of Ontario,and all of the old-timers retired! Theywere right-minded about that decision!”Ted says, after reviewing the currentPension crisis. “My aim in working overthe past 4 years with the UGRAExecutive is to see that the University ofGuelph recalls and fulfills its moralobligation to the retirees by fullyindexing their pensions! Let’s all join upwith UGRA, and get behind theExecutive as we push the administrationin the right direction!” Email: tedburnside@sentex.ca UGRA

MEET YOUR NEW UGRA PRESIDENT

Ted Burnside

Spring 2007

UGRAUGRA

UNIVERSITY OF GUELPH RETIREES ASSOCIATION,P.O. Box 4916,University of Guelph, Guelph, ONN1G 2W1

Two UGRA Awards are given in semester two (January) with

financial need used to determine the recipients from amongst the

eligible candidates. Please be sure any eligible family member is aware

of these opportunities. In each case application is made to Student

Financial Services. The application deadline is in early October so

application should be made as soon as possible after the start of the

fall semester.

University of Guelph Retirees Association Diploma Scholarship

An annual bursary of $500 is made available to students registered

in a Diploma program at the University of Guelph or affiliated

Regional Campuses with a minimum cumulative average of 75%

("B") in the last two semesters of full-time study who are related to a

member of the University of Guelph Retirees Association (UGRA) as

child, grand-child or great grand-child.

Selection will be based on greatest financial need. Apply to Student

Financial Services with a completed Financial Need Assessment Form

and a letter indicating name of and relationship to an UGRA member.

University of Guelph Retirees Association Degree Scholarship

An annual bursary of $1000 is made available to students

registered in an undergraduate degree program at the University of

Guelph with a minimum cumulative average of 75% ("B") in the last

two full-time semesters of study and who are related to a member of

the University of Guelph Retirees Association (UGRA) as child,

grand-child or great grand-child.

Selection will be based on greatest financial need. Apply to Student

Financial Services with a completed Financial Need Assessment Form

and a letter indicating name of and relationship to an UGRA

member. UGRA

UGRA SCHOLARSHIPS

IN THIS ISSUE

@President’s Message

#UGRA Executive Committee

Meets With President Summerlee and

Vice-President Sullivan

Communications with Retirees

$University of Guelph Retirees

Association Brief to thePensions and Benefits

Committee of the Board of Governors

%Financial Statements

^Tour of the Biodiversity

Institute of Ontario

&Meet Your New UGRA President

Third Age Learning Fall Program

List of Retirees

*UGRA Scholarships

Convocation Request

NEWSLETTERU n i v e r s i t y o f G u e l p h R e t i r e e s A s s o c i a t i o n

UGRA Info-line: 824-4120 ext. 52197

This year the Annual GeneralMeeting will be held in

Rozanski Hall which is a morecomfortable venue than the EastResidence Town Hall, the site ofprevious AGMs. Rozanski Hallis located across the road fromthe Bull Ring and is a short walkfrom the Gryphon Dome, thelocation of the President’sLuncheon (See map).

Refreshments will beavailable at 9:00 a.m. The AGMwill begin at 9:30 a.m. UGRA

THE UGRA ANNUAL MEETINGWILL BE HELD ON

FRIDAY,JUNE 15, 2007

TIME: 9:30 A.M. – 11:30 A.M.

LOCATION: ROOM 102,ROZANSKI HALL,

UNIVERSITY OF GUELPH

1. Approval of the agenda.

2. Approval of the minutes of the 2006 annual meeting.

3. Business arising from the minutes.

4. President’s report.

5. Treasurer’s report.

6. Committee reports:

• Pension committee

• Benefits committee

• Scholarship committee

• Web site committee

7. CURAC report.

8. New business.

9. Nominations for 2006 – 2007.

10. Election of executive.

11. Transfer of office.

12. New President’s remarks.

13. Nomination of auditor.

14. Adjournment.

(Copies of the various reports will be available at the meeting)

ANNUAL MEETING AGENDA

Rozanski Hall

CONVOCATION REQUESTConvocation is an opportunity for the campus community to

come together to celebrate the achievements of the year’sgraduating classes. Every year a number of volunteers return tocampus and provide much appreciated support at this event. TheUniversity would welcome the support of members of the RetireesAssociation at these celebrations handing out name cards, hoodsand programs, and robing the graduates.

This year will see the largest graduating class in U of G history,thanks to the “double cohort” students who arrived in September2003. Now, ready to make their way into the world, they areboosting summer graduation numbers by more than 30 per cent. Asif that weren't enough to keep organizers hopping, this June alsomarks the installation of Guelph's new chancellor, Pamela Wallin.

Because of the extra large graduating class this year and toaccommodate their guests the University has scheduled threeevening ceremonies. Ceremonies will be held on Monday, June 11,Tuesday, June 12 and Thursday, June 14 at 10:00 am, 2:30 pm and7:00 pm. The installation of the Chancellor will be on Wednesday,June 13 at 2:30 pm.

To find out more and learn about opportunities to volunteerplease contact Leslie LaCelle at 519-824-4120, ext. 56954 orl.lacelle@exec.uoguelph.ca UGRA

The Gryphon Dome: site of the President's luncheon.