Daily Bulletin

Here's the formula for calculating a normal pension under the UW pension plan, as cited in a paper from UW's Institute of Insurance and Pension Research. Mercifully, it also gives a rule of thumb: "the over-all benefits would be approximately 2%" of final earnings for each year of an employee's service at UW.

Many retirees face 'cap' on pension

The so-called "Revenue Canada cap" on the amount of an individual's pension applied only to "a few employees in higher wage sectors and some executives" when it was created in 1976, but it now touches "many employees such as professionals, middle-level managers of companies, and many Canadian academics", says the research paper, titled "Issues with Respect to the Revenue Canada Pension Limit". It was written by graduate student Hyun Tae Kim and actuarial science faculty member Robert Brown.

The "cap" is a rule that an annual pension from a registered pension plan can't be more than $1,722.22 per year of service -- that is, $60,278 (or $5,023 a month) for someone who worked for 35 years before retirement.

The paper by Kim and Brown takes UW's pension plan as a typical example of a pension plan with a good many high-earning employees, and calculates what salary ("final average earnings") someone would have to have before running into the Revenue Canada cap. The conclusion: $96,935 if he or she took the "standard" form of pension. Under changes made in 1995, other forms of pension are also possible for many retirees -- such as a higher pension for a surviving spouse -- so someone with a final salary as high as $102,843 might avoid running into the cap. (In some cases the flexible pension plan system introduced last year might make the maximum even higher.) But at some point, a faculty or staff member's salary gets high enough that he or she is paying pension premiums but won't get anything for them.

The limit was originally supposed to be indexed, but sat at $1,715 from 1976 to 1990 and has been at the present $1,722 level for ten years. "In 1976," the paper says, "the RC maximum only affected employees with earnings greater than 7 times the average wage, whereas now it is only 2.7 times."

The paper doesn't offer a figure for how many UW employees will have a high enough final salary that they'll run into the RC cap. One hint of the answer is the annual list of UW employees with salaries in excess of $100,000; the list for 1998, published in March 1999, included 104 names.

"Many employers," Kim and Brown write, "now consider Supplementary Executive Retirement Plans (SERP) as a normal solution to the widening RC pension gap. Because the limit is affecting ordinary employees it might be called as Supplementary Employee Retirement Plan. . . . A SERP essentially provides those capped by the RC maximum, extra pension benefits to compensate a full or partial amount of loss due to the RC pension limit. . . .

"A SERP is a non-registered and non-tax-assisted pension program." Such plans are very expensive because there are no tax deductions for the money involved, the paper points out. "They could also be politically and philosophically sensitive inside and outside the organization."

Guelph statement on academic freedom

Campbell's statement came after a controversy over remarks by Ann Clark, a professor of crop science at Guelph, on the subject of genetically engineered food. Rob McLaughlin, dean of the Ontario Agricultural College, which includes Clark's department, gave an interview about her comments, and was quoted as saying that it was "unethical" for her to express opinions outside her field of academic expertise.

Then in early February Campbell stepped in, issuing a letter that was published in U of G's newspaper: "Each and every faculty member at this university has academic freedom and may address any issue he or she wishes. The issue Prof. Clark is addressing is a current, substantive and important one, and I expect many other faculty will address it, pro and con, across the country. . . .

"Not everyone in an external audience is familiar with the fact that the University itself adopts no institutional view, but rather is an arena where members of the community have freedom to promulgate their own views. The difference is an obvious one for academics, but is sometimes not obvious to those beyond the campus. Second, I would expect any of us to indicate that our degrees and subsequent expertise lie in a particular field. These are things I routinely do myself; I do not find them burdensome.

"Dean McLaughlin has made very clear to me his continuing support of Prof. Clark's freedom to express her views. He and I agree that the word 'unethical' was not the best choice of words and that a better way might have been found to express the issue of the duty a faculty member bears to ensure clarity."

At the senate meeting a few days later, Campbell spoke about his letter, saying that it was written in consultation with Guelph president Mordecai Rozanski and with "legal expertise available to me and also . . . ethical expertise". He said:

The main message the president and I sought to convey was a very simple one -- the strongest possible reaffirmation of academic freedom. Prof. Clark has the freedom, as do all of us, to talk on whatever she wishes in any place at any time. And there can be no fear of recrimination for doing so. It is people who face up to important issues of the day that help us fulfil our duty to debate publicly those matters and issues of the day where we need an informed public and responsible public policy. . . .

Lay audiences do not always realize that we all speak freely and that we are not expressing some institutional viewpoint of the University per se. It is wise to ensure that our audiences realize that. It is also a simple matter of courtesy and responsibility to ensure that our audiences know our disciplinary background and where we are coming from. . . .

This has been difficult, no doubt about it. It illustrates many things, not least the high duty of care that we academic administrators have generally, and also very specifically with the press. But we will come through this, more dedicated than ever to our academic values, because we have reaffirmed some absolute fundamentals -- freedom of speech and mutual respect. And it doesn't hurt to have that reaffirmation now and then. So let the debate proceed, whether it be on GMOs or nuclear energy or health-care policies. Let us all be about our business, with care and courtesy and respect.

The talk of the campus

Four high school students have been named as winners of top honours, and 18 more as provincial champions, in the fourth Canadian Open Mathematics Challenge, operated by UW's Centre for Education in Mathematics and Computing along with the Canadian Mathematical Society. About 5,000 students took part this year, solving 12 questions within two and a half hours. The challenge is "designed to motivate younger students who have done some enrichment study beyond their school year and who are looking for a mathematics enrichment challenge," said Peter Crippin, a UW lecturer and chair of the challenge committee.

It's reading week in most UW faculties, but life goes on pretty much as normal in the department of co-op education and career services, where job interviews for the spring term are still in progress. Employer representatives visiting UW today can take a lunchtime break and hear a talk by John Chatzis of the chemical engineering department on "Battling Chemical Spills in Subsurface"; it's part of the "Chew on This" series introducing employers to ideas at Waterloo.

"How Safe Are Our Secrets?" asks Renate Scheidler, visiting UW from the University of Delaware. She's here in the department of combinatorics and optimization, and particularly in its Centre for Applied Cryptographic Research, and she'll give "an undergraduate talk" on her work at 4:30 this afternoon in Math and Computer room 2066.

The annual Hagey Bonspiel will take place this Saturday at the Ayr Curling Club. Organizers say there might still be two spots available for the 9 a.m. draw in this annual frolic-on-ice event; Pat Cunningham at ext. 5413 will have last-minute information.

"Take part in the bookstore's Midwinter Mystery Madness," says an inviting note from Beth Alemany, back on campus as marketing coordinator for the retail services department (and the recent mother of twins). From today through March 10, the store is offering 50 per cent off the prices of "selected mysteries" as well as a draw to win a copy of Kathy Reich's latest novel, Death du Jour. I haven't read Death du Jour, but the Amazon.com page about it makes it sound most dramatic. "A university teaching assistant disappears after joining a cult. Tempe must figure out where (and why) all the bodies are buried in the hard Canadian ground."

Let's look ahead to next Tuesday for a moment: it brings a public lecture by Jeffrey Luvall, who's been at UW this term as part of the Canada Trust Walter Bean Visiting Professorship in the Environment. Luvall, based at the Marshall Space Flight Centre, is an expert on remote sensing, the phenomenon of "urban heat islands" and ways of cooling down cities by using vegetation and other planning strategies. "Even if you can't control weather," says Luvall, "good urban planning makes a tremendous difference." He'll talk about his work under the title "Hot Cities or Cool Places: The Effect of Urbanization on Our Environment". The talk starts at 4 p.m. February 29 in the Humanities Theatre. Seats can be reserved in advance: call ext. 4973.

CAR

Editor of the Daily Bulletin: Chris Redmond
Information and Public Affairs, University of Waterloo
credmond@uwaterloo.ca | (519) 888-4567 ext. 3004
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