By Wojtek Dabrowski
Members of the Ryerson pension plan will have to wait to see their share of the plan’s $90-million excess surplus, after their latest proposal on how to distribute the money was rejected by the Canada Customs and Revenue Agency.
School employees pay into the pension fund and the university matches their contribution. The money is then invested. But the income made on the investment has been too high creating a surplus exceeding tax laws.
According to the Federal Income Tax Act, the excess surplus must be distributed among the employer and employees who pay into the fund. The pension members’ share of the excess surplus stands at $21.7 million. The university holds $19.1 million, while the other $49 million stays in the fund, said Bill Buhlman, Ryerson’s manager of pensions and benefits at Ryerson.
The school uses its portion of the money for things such as scholarships, and improving computer networks.
The 1,500 faculty and staff asked the CCRA — the agency responsible for enforcing tax laws — for their portion of the excess surplus to be transferred into tax-free Registered Retirement Savings Plans.
But the CCRA had concerns with the plan. The agency wanted assurance that past contribution cuts weren’t larger than future ones. The only way to prove this is a permanent contribution cut to the fund, but that’s not what the members were proposing. The CCRA also wanted the school to prove it had made cuts to contributions in the past — records the school didn’t have.
And so the employees will have to wait to see their share of the money while a committee of pension plan members is set up to rework the proposal. For now, the member’s money sits in an account with the rest of the pension surplus.
“We think [the CCRA] might not have totally understood what we were trying to tell them,” said Linda Grayson, Ryerson’s v.p. administration and student affairs. “It’s not the end of the world.”
Grayson said, regardless of the rejection, up to $4 million can still be spent on improving the school this year and next year, that amount will grow to around $5.1 million.