In-house pension fund developed
By Paul-Mark Rendon
A new pension management structure for Western employees was approved by Western's Board of Governors Thursday and enacted yesterday.
Louise Koza, manager of pension investment and plan policy at Western, said the new in-house system, the first of its kind among Canadian universities, has much to offer both current and former employees.
"As of [yesterday], there is a new pension board deciding what investment structure to offer," Koza said.
Formerly, retiring employees had to seek the help of financial consultants outside the university community to manage their pensions.
Now, employees may opt to have their pensions managed under Western's investment structure, which will be offered at a considerably lower administrative cost than other private companies, Koza said.
The plan also extends this advantage to former employees and their spouses, who have not yet drawn money from their pensions.
Margot James, retirement counsellor at Western's pension services, said the new plan translates into substantial savings for all Western employees. "Everyone can take advantage of this new plan," she said.
Normally, financial institutions such as Nesbitt Burns or CIBC Wood Gundy can charge up to three per cent commission on pension investment income. With no commission charges, James said the new plan can save thousands, depending on the size of an employee's pension.
James said the reaction to the new plan has been overwhelmingly positive. "People are just delighted, especially people who haven't got a lot of money, because they save so much more," she said.
Bill Trimble, senior director of human resources, reiterated James' sentiments and said the new plan is very exciting. "It offers a huge amount of flexibility to someone approaching or in retirement."
The emergence of the new plan has aroused the concerns of at least one student. "As a student, I'm concerned because my tuition has increased 110 per cent and we haven't received any notice of where our money is going. Teachers are already making a modest salary," said Richard Tan, a first-year honours business administration student.
Koza said the new pension plan would not have any direct impact on students. "Initially, there will be no effect at all." She added the savings offered by the plan may serve to retain faculty members, as well as attract new faculty to Western.