Queen's University retirees are expressing frustration over the new University Pension Plan (UPP) which they claim is failing to keep up with rising inflation. The UPP, a multi-employer fund launched in 2021 to address funding issues and maintain defined benefit pension plans, has been met with mixed results. While the plan aimed to provide increased retirement security through professional management and investment at scale, some retirees argue that the transition has left them shortchanged. The core issue lies in the indexation formula, which was tied to performance and maintained after the merger. This formula, based on investment performance, provided for increases to retirees' base pensions if an average return target was met over a rolling period. However, under the UPP, the fund's investments shifted to include private assets, leading to a choppier path of gains and losses since 2021, including a 9.1% net loss in 2022. This has resulted in stagnant payouts for retirees like Gordon Crawley, who has received no increases since retiring in 2021, despite a 16% rise in the consumer price index (CPI) over the same period. The UPP spokesperson acknowledges the challenge, noting that increases are not directly tied to inflation and can vary year to year. However, they argue that the return-based indexation formula can deliver higher increases in periods of low inflation. The situation raises questions about the balance between protecting the endowment for future retirees and ensuring current retirees receive adequate benefits. Some experts suggest that a hybrid formula, considering both the fund's ability to pay and the needs of beneficiaries, could be a solution. The UPP's future success in addressing these concerns will be crucial in maintaining the retirement security of its members.
