Ontario is a weird place sometimes. One month ago, the government announced that it was implementing a performance-based funding plan which – if you took the government’s half-thought-out comments seriously – raised the possibility that hundreds of millions or perhaps even billions of dollars currently projected to be spent on institutions might be snatched away if institutions failed to hit some ill-defined targets in a type of contract-based funding system. You’d think this would be a big deal, something people would want to talk about and discuss.
But no. Somehow, this is not what is currently obsessing the Ontario university sector. Instead, apparently, we need to talk about how it’s a human rights violation for professors to be asked to enjoy their retirement on a six-figure annual pension.
Crazy? Well, yes. Here’s the deal. Time used to be that universities could tell professors to retire at age 65 or 67 or whenever. Over the course of the 2000s, provinces gradually got rid of mandatory retirement; in Ontario this occurred in 2006, when the provincial government amended the Human Rights Code to that effect. It should have surprised absolutely no one that more and more full professors, who towards the end of their career routinely make over $180,000 per year, decided to delay retirement not just past 65 but pretty much forever. In 2011, only 6.7% of professors were over 65 and 0.9% 70 or over. Just five years later in 2016, that was up to 10.2% and 3.3% respectively. At the time, I estimated that the compensation costs for the over-65s amounted to $1.3 billion, or enough to hire about 10,000 new junior faculty. The share of that going to the 70-pluses would amount to a little north of $400 million.
But here’s the thing: federal pension legislation requires individuals to start drawing down their pensions at age 71. You can’t opt-out. And so as a result you get individuals who are in what Carleton University economist Frances Woolley recently called the “quarter-million dollar club” (do read Frances’ piece – everything she does on higher education is excellent, but she is extra-excellent on this one). Even if you understand the legislative path that led us here, you probably – rightly – think this is an outrageous sum, particularly in light of the fact that research productivity tends to decline over time and teaching loads among full professors are not all that onerous.
So the Ontario government’s budget legislation inserted some clauses which, to make a long story short, gave itself the power to make rules forbidding institutions to pay salary to anyone who is drawing a pension, thereby ending what it calls “double-dipping” and – presumably – give institutions a lot more leeway to engage in faculty renewal (though institutions have been careful not to be seen as having called for this measure, you can be quite sure they are all cheering it silently).
What was interesting, though, was that academic unions had a choice to make about this legislation. They probably couldn’t have welcomed it, since it was after all objectively hurting some of their members. But they may also benefit from the legislation, in that if that money does get used for faculty renewal, they stand to net gain a few new members. And even if the number of faculty members even only broke even, my guess is there are quite a lot of (sub-65) professors who would welcome a rejuvenation of the professoriate and some of the redistribution of workload that would entail.
But perhaps predictably, that’s not the direction the union took. Instead, OCUFA has taken up the absurd talking point that the government’s policy is to “make older professors work for no salary”. This is eight kinds of stupid because quite plainly no one is being forced to work (and generally speaking any time a bunch of highly privileged folks even think about insinuating that their plight compares to slavery, they need to go jump into the ocean, immediately). OCUFA has claimed that the move would “not save much money in Ontario” (I make it out to be well over $100 million in the first year at an absolute minimum, making me wonder what amount of money OCUFA would consider significant), and also that the government can’t be serious about faculty renewal because, well, essentially because they are Tories. But of course, money saved wouldn’t go back to the government, it would go back to institutions and as far as I know there is no real analytical case to show that institutions don’t use new money to hire new staff when they get the chance (see here, for instance).
I imagine OCUFA will launch a lawsuit, and though I am not a lawyer I suspect they have a pretty good chance of overturning the legislation since it would appear to both challenge human rights legislation and overturn collective bargaining arrangements. But you have to wonder if this isn’t a missed opportunity. The end of mandatory retirement has drastically raised labour costs without a corresponding benefit in productivity and has contributed enormously to the difficulty in hiring new staff and the associated problem of over-reliance on sessionals. Going back to the equilibrium system of fixed retirement ages would enormous benefits for junior faculty and indeed for the stability of institutional finances, both things most faculty members care about quite a bit, last I checked. The excellent Frances Woolley put it best: If universities can’t get rid of professors when they’re old, they will start trying to get rid of university professors when they’re incompetent, or simply surplus to the university’s requirements. That will mean the end – or at least the serious erosion – of tenure as we know it. It is unfortunate that the province’s faculty associations seem not to understand this.
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Long time no Chat!
Couple of points:
1. You are right. Anybody who characterizes what the government is up to by saying “faculty will be forced to work for no salary” is smart like sack of hammers. Problem is, if you re-read the article carefully, OCUFA says nothing of kind – neither does anybody quoted in the article. What we said is the regs would give the Minister the power to reduce the salary of post 71 faculty to zero – which it does. Though we don’t think that’s likely and have said so publicly. Indeed, the only person making the case that anybody would be ‘forced’ to work for free is the Globe headline writer you quote and we’re happy to band together with you to demand better of the Globe Headline Writer Union.
2. On the money piece I’m curious about the source of your confidence.
Notwithstanding the possibility of reducing comp to zero, best as I understand the scheme (and as we have been saying publicly) the plan is to hold faculty at the salary they would been at before drawing pension, so whatever they are drawing on a pension will be subtracted from gross comp thereby saving the institution that amount (assuming they get to keep it). Let’s say we agree that 5% of the professoriate of 17,000 (and that is high estimate of tenured faculty) is post 71 and they are collecting pension on average pension of $80,000 (again high, trust me that a very high number to average out at given that not everyone has a good DB plan. Unlike K-12 it’s not uniform, so plans are very good, some are shockingly bad, see Lakehead) that would put the savings somewhere in the $65-70 million range. And that’s before we know the answer to any of these questions: Will the claw back only be for DB plans or will it included DC plans? What about Hybrids? How would DC or hybrids converted to annuities or lump sums be handled? Are private RRSP’s in scope? Likely not, but if not why the wide ranging power to collect personal financial information? Even if we assume this pushes some folks out you also have to factor in the 10% of salaries that junior faculty hired out of this scheme would be paid that post 71 faculty don’t get? One might also factor in the lost grant revenue for post 71 faculty with active research projects and grad students who get the hint and stroll.
It’s also worth noting the comp difference between a younger new hire and a post 71 faculty member pushed out isn’t likely much different than my 75k guess above. The point being that when we look at net savings rigorously I think some folks will find that the $100 bills they were hoping to find in the couch will turn out to be nickels. And those nickels will have been expensive if measured in the political capital of relationships with faculty associations, a court battle over collective bargaining rights, and the morale of post 71 faculty. Though on the latter point I concede that may well be the whole point, ie demoralize post 71 faculty into leaving.
The 65-71 cohort is even more complex. What seems to get lost in the ‘double dipping’ spin is that only 5 institutional pension plans actually allow faculty post 65 to work and draw a pension and based on estimates from our members the number actually doing so is actually very small. Admittedly hard numbers on the cohort who exercise the option are tough to come by but that in itself is good reason not to be confident in people’s confidence about how much money this will save. The other variable of course is that for that the small number 65-71 affected by the regs, once forced to choose I’m guessing most will continue to work and simply delay collecting pension until retirement in which case the savings would be…zero. So it’s a bit specious to forecast savings in out years, more credible for the first year but that’s an important distinction if the plan is ‘faculty renewal and sustainability.’
Alas the above models are premised on trusting that this whole dog and pony show is about faculty renewal and like you I simply don’t have it in me to contemplate that the whole thing is populist mischief aided and abetted by people with a grudge against tenured faculty and faculty unions. HEQCO and Minister Fullerton say it’s a good faith process designed to renew and revitalize the professoriate and that’s good enough for me!
3. While Professor Woolley makes some fair points on the counter side of the argument, the notion that if faculty unions rolled over and allowed the Ford government to rip out provisions of collective agreements negotiated in good faith and agree to differential salary scales for faculty post 71 to penalize those compelled to collect pension by federal statute that that concession would somehow be rewarded with a renewed commitment to the principles of tenure is…a non sequitur. And it runs counter to my lived experience of Realpolitik and how to deal with bullies.
4. I agree this is unlikely to survive a legal challenge. MTCU is likely paying lawyers and actuaries $900 an hour to figure out how to make this hare-brained scheme work. I’m guessing it’s not going well.
5. What if this whole thing was a distraction from the fact that Ontario has the lowest public funding for post-secondary education by just about any measure one can imagine?
An excellent comment Michael.
Many new faculty members are now starting their careers well into their late thirties. This is not just due to a bottleneck of old people (such as me). Time to completion of PhD, plus in some fields the need to undertake post-doc(s), means that academic careers start late. Forcing retirement at 71 would reduce the career of a new incoming assistant professor to about 30 to 35 years, which I suspect is shorter than the careers of other professionals.
Also, most universities have not really tackled the question of faculty productivity once they reach the top of the salary scale, and that is a discussion that needs to take place. It’s certainly not fair to younger colleagues to let senior colleagues earn big salaries if productivity declines significantly. On the other hand, forcing productive seniors (they do exist!) to retire is simply discrimination based on age.
I rather wonder why anyone would wish to remain on salary once the freedom of emeritus status were offered. It seems the ultimate sort of tenure in which one can’t be fired or managed, because not on payroll in the first place.
You are peddling populist garbage. Educate yourself
https://qufa.ca/publications/qufa-voices/may-2019/