Ryerson’s pension plan suffers a 15% hit

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By Scott Nowoselski

Ryerson’s pension plan dropped by 15 per cent in 2008 when its pension firm, the Ontario Municipal Employees Retirement System (OMERS), lost $8 billion in the stock market.

“The university is a…fraction of the OMERS client list, so did we lose a proportional amount? Absolutely,” said Ryerson president Sheldon Levy.

Ryerson is the only Ontario university to register their pensions with OMERS.

However, Levy and Dave Mason, head of the Ryerson Faculty Association, said that the university’s pension plan is still strong, and the school may even come out ahead in 2009.

Mason said that since the university looks at their pension in returns over a five-year sliding window, the immediate future still looks bright for professors heading into retirement.

“If the markets were to continue to go down for an extended period of time, then clearly there would be a problem and we would have to look at increasing contribution rates and so on and so forth,” he said. “But because of the five-year moving average, I think it’s unlikely that we’ll actually be looking at having to increase contributions any time soon.”

With its recent loss, OMERS future pension obligations were only 90 per cent funded heading into 2009. With the markets continuing their steady decline, OMERS’ Andrew Fung said that many corporations were having to reconsider their pension structure.

Ryerson, however, plans to do nothing more than wait the recession out. Mason attributes this strategy to the highly-technical system on which faculty pensions run.

The school’s pensions are viewed on a five-year average, meaning that one year can only impact readings by a maximum of 20 per cent. As a result, Mason noted that the 15 per cent drop off in 2008 will likely only feel like three per cent when the damage is calculated later this month.

According to Mason, the school’s pensions were in such good shape coming into 2008 – hovering at around 106 per cent – that there is actually a chance that Ryerson could still be in the black heading into this year.

To complicate matters, universities in Ontario are required to deliver a report to the provincial government every three years indicating what percentage of pensions the school is able to pay out. Any number below 100 per cent means that the school must immediately alter funding to bring their pensions up to par.

Ryerson has no immediate plans to leave OMERS, which Mason feels is still the safest place for the school’s pension funds.

Despite their losses, OMERS still lost less than the average Canadian pension fund, which came in at just over 18 per cent for 2008.

 

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