In an era of ageing populations and low interest rates, universities are among the many institutions struggling to make adequate pension provisions.
The province of Ontario has already pioneered jointly sponsored multi-employer pension plans for teachers, healthcare workers and others. Three Ontario universities – the University of Toronto, Queen’s University and the University of Guelph – have now agreed on a similar scheme, which other institutions may opt to join later.
Suggested advantages of the University Pension Plan include: “greater transparency”, “clear and explicit sharing of risks between employers and plan members”, “more stable and predictable contributions” and “efficiencies and economies of scale” that offer “access to higher-return investment opportunities”.
“These [pension] funds are very large, and the larger the funds are, the more you have to invest, plus you have the flexibility to do different kinds of investments,” Angela Hildyard, special adviser to the president and the provost at the University of Toronto, told University Affairs, a magazine and website produced by Universities Canada, which estimated that the pooled pension funds totalled about C$8 billion (£4.8 billion) in assets.