Some Queen's University retirees are expressing frustration over the new University Pension Plan (UPP), which they believe has left them shortchanged in the face of rising inflation. The UPP, a professionally managed multi-employer fund launched in 2021, was created to address funding shortfalls and maintain defined benefit pension plans for university retirees. However, the retirees argue that the plan's investment strategy, which shifted to include private assets like infrastructure and real estate, has led to stagnating payouts. The indexation formula, which was tied to investment performance and provided for increases to retirees' base pensions, is no longer meshing with the UPP's investment style, resulting in little or no increase in pensions since 2021. This is particularly challenging for retirees like Gordon Crawley, who have seen their pensions fail to keep up with inflation, which has risen significantly in recent years due to factors like the COVID-19 pandemic and the war in the Middle East. The UPP spokesperson acknowledges the challenge but emphasizes that the structure ensures pensions don't decrease and that the return-based indexation formula can deliver higher increases in low inflation periods. However, critics argue that the CPI-based indexation formula used by the UPP and other participating universities may not be the best approach, as it bases increases on the needs of beneficiaries rather than the fund's ability to pay. The situation raises questions about the long-term sustainability of university pensions and the need for a more balanced approach to indexation that considers both the needs of retirees and the financial health of the pension fund.
