To the Editor:

There have been reports in the media that the Quebec government is proposing to use surpluses in pension plans to offset the effects of salary cuts. This idea is not applicable to McGill.

The McGill Pension Plan, by its very nature, cannot have a surplus.

All the funds belong to the members. The better the investment performance, the larger one's pension. The worse the performance, the smaller one's pension, to the point that the guaranteed minimum pension is reached.

The government proposals refer to defined benefit plans. In these plans, the pension is determined by length of service and final salary, but not the amounts contributed. It is the employer's responsibility to ensure that there is enough in the plan to cover present and future pensions. If the plan has more than enough to meet its obligations, then it has a "surplus." The investment performance of the fund has no effect on the size of pensions.

The answer is the same to the suggestion that a surplus in the McGill Pension Plan could be used to pay down the University's deficit. There is no surplus, there can be no surplus, the concept does not apply.

Saul Ticktin
Administrative and Support Staff Representative
Pension Administration Committee