Salaries & Benefits Must Be Good at SFU – So Few of Us are Leaving
Neil R. Abramson, SFUFA President
It’s a bit of conventional political wisdom that the governing party will usually be re-elected when times are good. If the economy is growing, and with it wages, and people are reasonably comfortable, the people rarely turf out the governing party in the next election. Certainly, that has been Mr. Harper’s strategy, and he’s done well, and it’s worked so far over the last two or three elections.
We’re having a bit of an election these days at SFUFA. Members are being asked if they are willing to sign cards endorsing the idea that SFUFA become a union. If enough members sign cards, there will be a vote, monitored by the Labour Relations Board. If enough people don’t sign cards, then they will be endorsing the idea that SFUFA stay as an association with the same powers it has had for the last fifty years. I figure that if SFUFA members are very satisfied with their work situations at SFU, then they are less likely to sign cards. Less satisfied – more likely to sign because a change could be better, and the current situation has not brought satisfaction, or happiness. After 50 years as an association, I am arguing you should turf out the old ways, and give SFUFA more leverage as a faculty union. Because even though there are lots of things that are good about our work environment, there are many others that are un-satisfactory.
Truthfully, I have been thinking a bit lately about retirement. In this communiqué, I wanted to address the retirement deal we get from SFU related to our defined contribution pension plan currently housed at SunLife. I suppose it might seem that I am writing mostly to older SFUFA members, but if I had known this stuff 22 years ago, I might have preferred the job offer from McGill, or even the one from Texas.
Back in 2008, before the big recession, I understand that the average age for professors retiring was about 62. Hey, I’m pushing 61 so maybe its time to think about this. But recently I learned from a senior administrator that more than a hundred profs at SFU are over 65, and from another that we have double digits of profs in their 70s. There’s no mandatory retirement anymore, so why leave a good thing – right? I personally know two colleagues, around age 65, who say that their whole life is their work and they definitely and emphatically don’t want to stop. I even met my old mentor at a recent SFURA Retirement Planning seminar – he’s been retired for nine years (forced out by mandatory retirement). He still has a big grant and is still publishing. Clearly, these people are working longer because they want to. They are happy. They are getting, and doing what they want.
On the other hand, there are others who are still working for very different reasons. I ran into an old colleague of mine on Convocation Mall the other day. I always figured he was a lot older than me so I said, “Bob (I’ve changed his name, of course), what are you still doing at SFU. I haven’t seen you in years. I figured you were retired.” And he asked if had I ever looked at what my pension was worth in terms of the income it could generate. He said he couldn’t afford to retire. We parted, joking that we would know we were finally retired when we heard the earth coming down on the coffin lid we were lying under. Life-long commitment, really! Does he have any choice? Do I?
George is another friend of mine, aged 64. He wanted to retire a couple of years ago. He wasn’t happy in his faculty. He had better things to do. He told me that after he saw how much was in his SunLife account, he realized he could never retire. And he hasn’t.
I empathize with George. The pension plan receives 10% of your salary every year you work at SFU. Administrators get 15% but obviously running the university is worth that difference. I calculate that my SunLife pension is worth about $15,000 a year, maybe $18,000 in a couple years if rates stay the same. I’ve been at SFU a year longer (almost 22 years) than George, and I have always had a market differential and he not. So my pension must be a bit more than his.
So how much do you need? According to Canadian Business (David Aston, “How much do you need to retire well,” May 8, 2012), an upper middle class couple will spend $60,000 to $70,000 per year retired. Government pensions (CPP & OAS) will cover them for up to $30,000 assuming long careers at average wages. So an upper middle class couple will need to cover $30,000 to $40,000 of their retirement income from their personal savings.
Luckily, the SFU pension plan will cover $15,000 in our case, so we will only be $15,000 to $25,000/year short. That means we needed to have saved between $300,000 and $500,000 assuming you are willing to invest in dividend paying stocks that average a 3% to 5% dividend return (5-7% after tax). If you can’t do without the safety of bank GICs or T Bills, you need to save about $750,000 to $1,250,000 assuming a 2% interest return (1.5% after tax). However, I will need more because somehow having spent so many years at school, I only qualify for 75% of the full government pensions, and my wife, an immigrant, only 25%. This means between $600,000 and $800,000 to invest for dividend income. If your financial plan won’t eke out these numbers, then you’d better not retire. For my colleagues who are not numerically challenged, I should say these are just rough MBA style calculations.
It’s too bad that we have these hard topped salary scales at SFU. It makes it harder to save for your retirement when the value of your salary is declining in constant inflation adjusted dollars.
Once you are at the top of your scale for full prof, associate prof, assistant prof, lecturer, senior lecturer or librarian, your salary can only go up by the percentage SFUFA is able to negotiate for you. This is 2% for 2014, and 2013 retroactively. I forget but wasn’t it 0% for a good number of recent years before that? Assuming inflation over the last 5 years, including that projected for 2014, was 8.63% (2014 = 1.48; 2013 = 0.94; 2012 = 1.52; 2011 = 2.91; 2010 = 1.78), and you received 4% in total wage gains, you have only lost 4.63% in buying power. Of course, if you are a full prof, we managed to get you some new half steps so if you get a 1.5 in your biennial review, you’ll get one of these. I don’t know, but it seems to me a bit difficult to be saving between $300,000 and $1,250,000 when low wage increases and inflation are reducing your buying power year after year.
By contrast, UBC faculty don’t have these hard topped salary scales. When I came to SFU twenty-two years ago, salaries at SFU and UBC were pretty much the same. Now, I hear that on average UBC salaries are 30% higher, and one senior colleague of mine told me that UBC Sauder Business School salaries are 40% higher on average than SFU Beedie School of Business.
The difference is that, lacking hard scale tops, UBC faculty generally receive cost-of-living as well as any gains negotiated by their Faculty Union. In the last arbitration, while we at SFUFA got the munificent 2% salary gain for each of two years, and UBCFA got their members 2.5%, their members also got 2.5% per year in cost-of-living for a total of 5% each year. We get 2%; they get 5%. Oh, and we got a bit extra for full profs, and a bit for our seriously underpaid librarians. It’s easy to see where that 30% differential came from over a twenty plus year period. And certainly, UBC faculty didn’t see their real wages decline due to inflation when they were getting 0% wage gains because they were still getting something to offset cost-of-living anyway.
Look! If you are satisfied with this situation, then don’t sign cards and don’t vote for SFUFA to unionize. If you think our SFU pension plan could be improved, and that we would have a better chance to save for retirement if we didn’t have these darned hard topped salary scales, then vote for change by signing cards, and voting for certification. Throw out the old, and hope for better with the new. It’s unlikely to get worse.
I’m not promising anything about whether the pension and the salary tops will be transformed if SFUFA is a union. I don’t see Mr. Trudeau promising that everything will be different when/if he replaces Mr. Harper. Mr. Trudeau is just saying, “Throw the buggers out,” and that’s what I am saying as well. We at SFUFA have had 50 years to constructively address these issues with SFU. And it has become very clear that without all the negotiating power we can get, and better avenues for mediation or arbitration, we are stuck.
If we at SFUFA were certified, however, we could negotiate a much wider range of issues. And we would have more ways to get things like pension and salary scales on the table whether the university, or PSEC, or the provincial government wanted to or not. We could ask for mediation. We could ask for arbitration. We could join faculty at UBC and now Uvic in a different system with more rights and more ways to keep negotiations moving.
I can’t promise anything. Certification is about getting more tools in our kit, not about any particular outcome – what we try to bargain and whether we achieve it is still up to us and the university. But we’d be going to the table with a lot more resources at our disposal. And since we’ve been stuck for such a long time, I think it’s time we started looking at what more we ourselves can bring to negotiations to help get unstuck.
I encourage you to consider voting for change! Change offers more hope than stasis. Sign a card. And when the time comes to vote, vote for a certified faculty association.