Pensions vs. Mortgages

[Tamon Stephen <tamon@sfu.ca>]

Dear all,

SFUFA will soon ask us to vote on significant changes to pension plans.  I appreciate SFUFA's efforts on this, in particular in identifying issues with the current plan.  I've learned a lot from their resources*.  However, I believe that we should vote NO in the referendum.

The proposal will _require_ all current SFUFA members to contribute 10% of salary (7% after taxes) to their pensions.  This is a lot to ask, especially given the housing market here.  Many SFUFA members have significant mortgages.  For someone who is putting this 7% into reducing their mortgage, moving this to the pension is effectively having them borrow an extra $5000+/year to fund their contribution.    Other members are saving for down payments, sending money to family overseas, etc.  I do not think that we should require them to contribute this money to a pension plan instead.

The question in the previous (2015) pension proposal was quite different, as people could opt out.  Roughly, in that previous vote, 31% voted yes, 9% voted no, while 60% did not vote.  So many people are not paying attention to SFUFA's pension proposals**.  If anything, I feel there has been less discussion this time.  I encourage those of you who are not paying attention to 1. learn about what is being proposed* and 2. if you are not sold on this to the extent of _requiring_ your colleagues to invest tens of thousands of dollars (which they may have to borrow), then please vote NO.

Note that since SFUFA considers this a referendum, they will proceed to implement this on a mandate of half of cast votes.  So e.g. 26% for, 24% against, 50% not voting means _required_ contributions from 100% of SFUFA members, including the 24% who voted NO and the 50% who did not vote. 

Best regards,

Tamon Stephen 
 
* SFUFA has posted some resources which I found quite helpful:
<http://www.sfufa.ca/current-issues/pensions/resources/>

** I expect that those close to retirement are following this very closely, while those far from retirement are paying very little attention.  As I understand the proposal, it may be beneficial to someone very close to retirement (esp. people who own homes outright), but not for younger members (esp. those who have mortgages or plan to).