By Caroline Alphonso
Ryerson administration is waiting for its employees to get back to them on $54.5 million question.
That’s all the school can do while an excess surplus of that amount sits in its pension plan fund.
“Employee groups are now in the process of consulting with their legal and actuarial council,” said Linda Grayson, Ryerson’s v.p. administration and student affairs.
Employees have to decide exactly what to do with their half of the excess surplus, which comes to $27.2 million, and then make amendments to the proposal on hand.
Ryerson, like other organizations, is allowed by Revenue Canada to have a surplus in its pension plan to act as a cushion when markets fluctuate. But the Income Tax Act of 1992 placed a cap on any excess pension funds.
Ryerson’s pension committee, made up of administration, staff and faculty members are proposing some of the excess surplus form both the employers’ and employees’ share be put toward increasing pension benefits.
Under the proposal, Ryerson’s administration, who would stop paying into the pension plan, will have a total of $4.6 million freed up every year for up to five years. Part of this money would go toward pension benefits.
The rest of the cash could be used for improvements within the school.
“We have a huge list of areas of high priority like improved labs, improved physical infrastructure, faculty and staff renewal, scholarships and bursaries,” Grayson said.
“This is one-time money. At the end of the five years that money will be gone. What do we do after five years?”
Employees also would have to use part of their half of the money toward improving pension benefits.
The remaining funds could be used for a contribution holiday, where money is divided between all active members except for retirees.
Bill Glassman, who represents faculty on Ryerson’s pension committee, said another option would be to give all members who have contributed to the pension fund, including retirees, a cash payment.
As of January, 1997, there were 1,107 members of Ryerson’s staff and faculty who contributed to the pension fund, and 330 people drew pension benefits.
Ryerson’s excess surplus grew to $17.8 million in 1997 from $1.3 million in 1996.
To help balance this growth, Ryerson employee contributions were dropped by 1.5 per cent in July, 1996. But this did no decrease the excess surplus, which rose to $54.5 million in 1998.
For now the pension committee will wait to hear all amendments to the current proposal.
“[The employees] will get back to us on how they want to use their half of the excess surplus,” said Larissa Allen, executive director of human resources and a member of the pension committee. “So then we’ll make all the changes for the committee to review and they’ll be working busily away.”
After this, the final proposal will be taken to Ryerson’s board of governors for approval.
“We’re hoping to do it as quickly as possible, but depending on the length of time the employee groups need to determine how they are going to allocate their share of the excess surplus, it may take some time,” Allen said.
“But we’re really hoping to get to the board by May, 1999.”