|
I agree that for current faculty members,
guessing at preferences is not a good idea. Everyone's voting
for their own preference is definitely the best way to ensure
maximum preference-satisfaction, as I've argued before.
But, unless another change occurs in years to
come, the majority of people who will be affected by our
decision are future hires. And it's not just that future hires
do not get to vote.
DB has a huge benefit for them which
dissipates rapidly with the length of time each of us has been
here: freedom from worry about retirement.
At the same time, they will not be faced with
a disadvantage of DB that, for many of us, grows with the time
we have spent here: the lack of freedom to do what we will with
the financial resources we have accumulated in anticipation of
having tosupplement the money in our Sun Life accounts.
So, as I said, I believe for the non-voting
majority (future hires) DB is definitely the better choice.
M
On 11/24/2018 4:21 PM, Krishna Pendakur
wrote:
Definitely true about future hires not getting a say.
However, it is hard for me to see the prisoners’
dilemma on this issue. What did you have in mind?
My main point was that if we are all trying to guess
what other people mostly want, we may introduce a lot of noise
into our decision processes.
krishna
______________________
Krishna Pendakur
On Nov 24, 2018, at 4:15 PM, J. S. McIntosh
< jillmc@sfu.ca> wrote:
Thanks, Krishna. But future hires are not
voting now. What we decide now
will affect them greatly.
This reminds me of the standard philosophical
debate--what, if anything, do we owe future
generations, especially those not blood-linked to
us?
Plus, everybody acting in their own self-interest
often results in the well-known Prisoners' Dilemma.
We can all wind up worse off.
At the very least, it simply is not true that what
the majority chooses is what the altruist would have
chosen.
Jill
From: Krishna
Pendakur <krishna_pendakur@sfu.ca>
Sent: Saturday,
November 24, 2018 4:05 PM
To: Martin
Hahn
Cc: Krishna
Pendakur; Gervase Bushe; Ronda Arab; Nilima Nigam;
Behraad Bahreyni; Francesco Berna; Yildiz Atasoy;
Tamon Stephen; Eugene McCann; academic-discussion@sfu.ca
Subject: Re:
pension plan
Hello Martin and others interested in
altruistic voting: It is quite difficult to know
what the majority of members want, and so quite
difficult to figure what this altruistic vote should
be. Consequently, it might be easier if we all
voted in our own self-interest. Then, if a big
majority want one thing, it will automatically be
what we do (and what the altruistic voter would have
preferred).
krishna
______________________
Krishna Pendakur
On Nov 24, 2018, at 3:56 PM,
Martin Hahn < mhahn@sfu.ca>
wrote:
Hello everyone,
I have been
following the interesting discussion
and thought I would make one more
contribution.
As I've said
before, there is no reason for those
of us near retirement not to vote for
DB. Whatever plans you we had for our
DC funds, we can still go ahead with
them, but there is a chance that using
the money (plus perhaps some RRSPs) to
buy into the DB will provide a better
option. And the handful of years of
contributing 10% to the DB plan surely
will not make that much difference.
That said, I do
think there is also an altruistic
reason to vote for the DB plan. As
Krishna pointed out (and the content
of this discussion bears out) the
choice is between a significantly
better annuity and the freedom to
choose do do something else with one's
money. This is the usual choice one
makes when deciding to pool resources
and spread the risk. The choice is
seldom obvious: witness all those
people in the US unwilling to give up
their freedom to choose their health
insurer, but also the fact that most
of us don't think it is unfair that
the person who gets sick gets access
to our hard-earned cash contributions
while we don't.
Sometimes the
choice seems pretty obvious: Years
ago, we rented a sabbatical house in
Burlington Vermont. When I asked about
garbage collection, I was told I
needed to arrange for it. I spent a
couple of hours with the phone and the
yellow pages (it was all more
complicated than one would expect) and
exercised my rights by talking various
garbage companies. Needless to say,
the feeling of freedom was
exhilarating - especially when it
turned out that every option cost more
than what we were paying our own
municipality in BC for garbage
collection.
But seriously:
all of us who are currently at SFU
have been aware that the DC pension
plan will not, in itself, provide us
with an adequate retirement income.
So we have made other arrangements:
savings, stock market, real estate,
whatever. But now, of course, the DB
plan presents itself as a restriction
on our carefully planned choices -
which is exactly what it is.
But consider our
future colleagues. My bet is that
most academics don't really want to
spend a lot of time thinking about
money (if money is what you really
care about, going into academia is an
odd choice of career) and that having
an actual pension plan that will
provide enough income to live
reasonably well would be very
attractive. Not having to worry about
your retirement is a huge benefit over
and above whatever the monetary
benefits there might be - exactly in
the same way that not having to worry
about being able to afford medical
treatment is a benefit over and above
the average monetary benefit each of
us gets from a single payer health
insurance. But note that those of us
who are current faculty have already
missed out on this - we are here, we
see DC will not provide, we were
forced to make other arrangements. So
DB presents as a restriction on our
freedom. But personally, I would much
rather be hired with DB and decent
post-retirement health insurance than
into the present system.
MH
On 11/24/2018
3:11 PM, Krishna Pendakur wrote:
Gervase:
You can keep your DC accumulated
assets, but your future contributions
would be to DB. 101 times lucky!
krishna
______________________
Krishna Pendakur
On Nov 24, 2018, at
3:09 PM, Gervase Bushe < bushe@sfu.ca>
wrote:
Is it
possible to stay with our DC
plan for those of us nearing
retirement if the vote is to
go for a DB plan?
Sorry if
this question has been
answered 100 times already.
Gervase
R. Bushe
Professor
of Leadership and
Organization
Development
Beedie School
of Business
Simon
Fraser University
"But the
more I read
these threads
the more I
realize that
the
fundamental
issue here is
not choosing
between a DB
vs a DC plan.
This vote it
is essentially
about allowing
or denying
each of us to
have the
possibility to
have that
choice. "
There
is no choice
to have a DB
plan, if the
vote is no. If
you are woman
and you want
to buy an
annuity with
your savings,
it will cost
considerably
more than if
you are a man
(I think it
was about 30%
more?). For
me, a no vote
forces
uncertainty
about
my retirement;
I will
not inherit a
cent from
parents and my
pension will
be reliant
entirely on
market
forces.
A no
vote is also
denying decent
health care
benefits from
those that
want them.
Yes, we could
try to
negotiate with
SFU for better
health care
benefits, but
it will cost
us. SFU is not
going to
simply give us
more expensive
post-retirement health care benefits. It will mean those 1% or 1.5%
raises will be
reduced
considerably.
Or it will
mean our step
raises will be
reduced. For
those with
market
differentials,
these losses
in salary
quite possibly
do not mean a
lot. For those
who are paid
on the scale,
these small
improvements
in pay do mean
a lot.
Dr.
Ronda Arab
Associate
Professor of
English
Simon
Fraser
University
Dear Yildiz and Eugene,
Thank you very
much for
sharing your
personal
situation. I
can totally
relate and
would love
very much to
retire at 71
with a decent
DB plan. But
the more I
read these
threads the
more I realize
that the
fundamental
issue here is
not choosing
between a DB
vs a DC plan.
This vote it
is essentially
about allowing
or denying
each of us to
have the
possibility to
have that
choice. By
voting yes we
are starting a
path that will
eventually
force everyone
including the
ones who would
prefer to stay
with the
current plan
to save a
considerable
part of their
salary in a
way they don't
appreciate.
This is
despite the
BCPP fund
substantially
operates very
much like any
other
financial fund
(the proposed
10.15% is
based on the
"calculative
logic" that
most of us
abhor).
Moreover it
appears that
we could
already use
the current
SunLife DC
plan to put
that 10.15% in
a fund that
will
substantially
allow to have
the benefits
proposed by
the BCPP plan.
So although I
am very much
in favor of
having the
possibility to
join a DB
plan, I
realize that
the path that
SFUFA is
currently
proposing will
have a serious
impact on the
financial
flexibility of
each member of
our community.
Thus, I am
torn because I
see an element
of selfishness
more in voting
yes than in
voting no.
Francesco
________________________________________
From: Yildiz
Atasoy [yatasoy@sfu.ca]
Sent: November
24, 2018 10:46
AM
To: Krishna
Pendakur;
Tamon Stephen
Cc: Eugene
McCann; academic-discussion@sfu.ca
Subject: Re:
pension plan
Dear all,
I made my
decision and
voted in
favour of
switching to
the college
plan. I don't
have a
financial
advisor or an
accountant. I
earn my salary
and pay my
mortgage. I
have no
inherited
wealth. Thus,
my financial
situation is
simple and
straightforward.
I do not allow
a 'calculative
logic' to
dominate my
life choices
either.
The 10 per
cent personal
contribution
required by
the proposed
plan makes
sense to me.
Sincerely,
Yıldız
Dr. Yıldız
Atasoy
Director,
Centre for
Sustainable
Development<http://www.sfu.ca/cscd>
Professor,
Sociology<http://www.sfu.ca/sociology-anthropology/People/faculty/yildiz-atasoy.html>
Associate
Member, the
School for
International
Studies
Associate
Member,
Department of
Geography
Simon Fraser
University
NEW BOOK:
Commodification
of Global
Agrifood
Systems and
Agro-Ecology:
Convergence,
Divergence and
Beyond in
Turkey<https://www.routledge.com/Commodification-of-Global-Agrifood-Systems-and-Agro-Ecology-Convergence/Atasoy/p/book/9780415820509>
Mailing
Address:
Simon Fraser
University
Department of
Sociology and
Anthropology
8888
University
Drive,
Burnaby, BC,
Canada V5A 1S6
E-mail: yatasoy@sfu.ca
Fax: +1
(778) 782-5799
________________________________
From: Krishna
Pendakur <krishna_pendakur@sfu.ca>
Sent:
Saturday,
November 24,
2018 9:35:59
AM
To: Tamon
Stephen
Cc: Eugene
McCann; academic-discussion@sfu.ca
Subject: Re:
pension plan
Regarding
tamon’s last
point: Sfufa
can negotiate
over retiree
health
benefits and
could seek to
improve them,
eg to equalize
them with pre
2001 hires.
Whatever this
costs would
have to be
given up from
other
improvements
to salary or
benefits (as
usual).
Krishna
Sent from my
iPhone 6!
> On Nov
24, 2018, at
9:02 AM, Tamon
Stephen <tamon@sfu.ca>
wrote:
>
> Hi
Eugene,
>
> Thanks
for the candid
illustration
of your
situation, it
is interesting
and
informative.
I believe that
there are a
number of
faculty in
similar
circumstances
- for
instance,
Lucas
Herrenbrueck
mentioned
student loans
recently, as
have others
earlier in the
discussion.
Given the
housing market
here, I think
the overall
picture you
paint is
gradually
becoming the
norm here,
especially
with respect
to not putting
additional
money towards
retirement.
>
> However,
I disagree
with your
overall take
on it. Your
take is that
someone should
to be forcing
you to save.
You don't seem
to consider
that you may
actually be
making very
good decisions
with your
money. I
think among
faculty, very
few of us are
extravagant.
Even where we
have expensive
tastes,
honestly, we
barely have
the time to
act on them.
Many of us are
spending most
of our income
on basic stuff
since housing
here takes so
much of it.
>
> Let's say
you vote NO
and let
yourself keep
the 10% of
salary for
2019-2020.
Say that's
$7000 after
taxes. What
would you do
with it? For
example, you
could use some
of it to take
a modest
vacation with
your family.
Fix up one or
two things
around the
home. But the
kid one thing
that they
don't really
need. Pay a
babysitter and
go out for a
nice dinner.
Travel to a
regional
meeting you
might not have
gone to (if
your grants
won't cover
it). And
maybe put the
rest to paying
off some of
your debts
early. Or the
RRSP. All of
these would be
good things to
do. What
about the
$7100 in
2020-21? And
the $7200 in
2021-22?
Etc.?
>
> What if
you save it
until you are
70? Well, you
can take the
same
vacation.
Your arthritis
may limit your
hikes. You
can send your
kid a
postcard. I
think for a
lot of us,
what we do at
50 is going to
be
significantly
more important
than what we
do at 70.
Should you
donate to stop
climate change
in 2020 or
2040? In
very many
cases tough
decisions
younger
faculty are
making against
saving are
actually
*great*
decisions.
The problem is
that people
who talk up
retirement
(financial
advisors are
the biggest
culprits,
though all DB
marketing
suffers from
this) try to
shame them or
frighten them
with a fear of
"running out
of money" at
92.
>
> Well,
maybe. But
you are
already
preparing for
92 by buying
your
townhouse. If
you can get
your mortgage
and other
debts payed
off, you can
probably live
quite cheaply,
especially
once your kid
is no longer
dependent.
Say that by 70
you are a
retired empty
nester with
your house
paid off.
What expenses
are going to
force you to
cash out and
move to
Abbotsford?
Likely CPP and
OAS will
continue to
exist in some
form.
(Indeed, if
you do well in
retirement,
OAS gets
clawed back -
this starts at
around $76,000
right now - so
high regular
pension
payments may
turn out to be
less effective
than you might
expect. This
is the kind of
detail where
expert advice
may help,
though you can
also look into
it on your
own.)
>
> Health
care of course
is a worry,
but note that
for instance
assisted
living in BC
for non-rich
people charges
a percentage
of after-tax
income: <https://www2.gov.bc.ca/gov/content/health/accessing-health-care/home-community-care/care-options-and-cost/assisted-living>.
So you may as
well have run
through your
money at that
point. In
short, it may
actually be a
great idea to
spend now
while our
health is
good, our
families are
young and our
careers are
bright, and
try to cut
back in our
70's, 80's and
90's (assuming
we are lucky
enough to make
it there).
>
>
> Several
of the things
you write also
apply to me.
I'm mortgaged
and don't have
an accountant
or a financial
advisor. I
don't think I
can beat the
markets, and
wouldn't
expect a
financial
planner to do
so either.
I'm also
somewhat
distrustful of
state pension
funds ... but,
here is where
I start to
lose you ...
BCCPP _is_ a
state pension
fund. So I
don't
understand why
you want to
invest in it,
and especially
why you feel
comfortable
forcing me to
invest in it.
>
> Overall,
BCCPP smooths
out some risks
(stock crash)
while being
more exposed
to others
(inflation,
presumably one
of the reasons
SFU fled DB in
the 1970's).
Note that
interest rates
are going up,
and the
cost-of-living-adjustment
for BCCPP is
capped at
2.07%.
Between BCCPP
and CPP, I
personally
have more
trust in CPP
to at least
hold its
current
value. (Note
the recent
post that CPP
is
_increasing_
its
contribution
and payout
rates.
Interesting
news, I had
missed
that.)
That's partly
from spending
some time
trying to
figure out
what BCCPP is
and how it can
be held
accountable.
It is
unclear. I
have the
feeling that
we may as well
be asking ICBC
to run our
pensions. My
sense is also
that BCCPP is
easier damage
if and when we
get our own
Rob Ford here
- college
teachers are
an inviting
target
politically,
while CPP is
hard to reduce
since it
affects _all_
seniors.
>
> A few
technical
comments:
>>
Mandatory
pre-tax
savings are
much more
beneficial to
one’s future
than voluntary
post-tax
savings.
>
> Mandatory
vs.
non-mandatory
is mostly
distinct from
pre-tax and
post-tax. I
like pre-tax
and hate
mandatory.
>
>>
Junior
colleagues
would benefit
from learning
from my
experience and
finding a way
to squirrel
away the 10%,
even though I
know how very
very hard it
is here in
Vancouver. In
the long run,
they’d be glad
to have had
the decision
taken out of
their hands
each month and
to see the
financial
benefits down
the line.
>
> I don't
understand
what you are
saying here.
You don't
learn much by
having things
taken out of
your hands.
(Active
learning and
all that.)
Honestly, I
think that an
underrated
fringe benefit
of the Sun
Life setup is
that it
encourages us
to explore
investments in
a fairly
limited
environment.
There's some
value in doing
that early on,
as you may
eventually
want to become
more active.
If you don't
want to learn
anything at
all, then the
suggested
course of
action is just
to put it in
the SFU
Balanced Fund,
which should
provide
similar
investment
returns to
what is
happening
inside BCCPP.
No neurons
need to fire.
>
>> much
improved
health
benefits
>
> Yes, this
is an
important
point, but I
believe it
should be
addressed in
another way.
I do think it
would be a
good think if
we could trade
say 1% of
salary to get
people hired
after 2001 the
same benefits
options as
those hired
before. I
suppose by now
some people
who were
mid-career
hires after
2001 may
already be
retiring,
especially if
they have
health
issues? I
think that a
fair solution
to the medical
issue should
involve
extending
benefits not
just to
current
employees, but
also to this
currently
small group of
retired
employees.
(Has there
been any
discussion of
this?
Thoughts from
SFUFA?)
>
> Have a
great weekend
all,
>
> Tamon
>
________________________________________
> From:
Eugene McCann
<emccann@sfu.ca>
> Sent:
November 23,
2018 8:03 PM
> To: academic-discussion@sfu.ca
> Subject:
Re: pension
plan
>
> Dear all,
>
> I have
been reading
this
discussion
with interest
… the sort of
bemused
fascination
one might have
when
encountering a
context very
different from
one's own.
That is to say
that I don’t
see myself in
much of what’s
been
discussed.
Let me tell
you a bit
about myself,
then, as
someone who
supports the
move to the
Defined
Benefit plan.
>
> I am just
under 50. I
make massively
more money
than my
working class
parents ever
did. My
income is
nowhere near
the high end
of incomes at
SFU. I ‘own’
a townhouse (I
rent it from a
bank,
actually, but
I do accrue
equity in the
process). I
came to
Vancouver in
2003, so the
market was
already insane
and my
mortgage debt
reflects
that. My
income is the
only large or
stable/predictable one in my household. I have a child (with all the
joys and
expenses that
entails). My
household is
still saddled
with
significant
student loan
debt from the
US.
>
> We have
not, and will
not, benefit
from any
significant
intergenerational
wealth
transfer
(inheritance
or ‘family
money’). We
have never
‘maxed out’
our RRSP
limit.
Indeed, we
have almost
never
contributed
any money to
RRSPs because
we never have
available
funds. We do
not have a tax
accountant.
We do not have
a financial
advisor (not
for a want of
trying, in the
latter regard,
but everyone
we’ve tried to
engage has
either seemed
marginally
competent,
unaffordable,
or
uninterested
in working
with us, given
our
(relatively)
paltry
resources.)
>
> I do not
trust my
ability, as an
individual, to
manage,
benefit from,
‘play,’ or
‘beat’ the
financial
markets, even
with the help
of a competent
financial
planner. I do
not trust the
idea that
state pension
funds will be
available in
any robust way
by the time I
retire.
>
> I also do
not trust
myself to make
decisions like
squirrelling
away 10% of my
salary for
retirement.
But I fully
believe that I
should do this
and I wish I
had been doing
it for years.
But, as a
songwriter
once said, “If
wishes were
fast trains to
Texas … how
I'd ride.” I
always found
other things
that needed
the money in
expensive
Vancouver. If
only somehow I
had been
forced to (as
opposed to
have to make a
rational
choice to)
squirrel that
money away
each month.
If only there
were a way
that that sort
of external
discipline
could be
engrained in
my retirement
plan.
>
> So,
that’s me.
And here’s
what I
believe:
>
> - I am
not saving
enough for
retirement.
>
> -
Mandatory
pre-tax
savings are
much more
beneficial to
one’s future
than voluntary
post-tax
savings.
>
> - Junior
colleagues
would benefit
from learning
from my
experience and
finding a way
to squirrel
away the 10%,
even though I
know how very
very hard it
is here in
Vancouver. In
the long run,
they’d be glad
to have had
the decision
taken out of
their hands
each month and
to see the
financial
benefits down
the line.
>
> - While I
have some
equity in real
estate, to
cash out and
use that to
live I will
need to leave
Vancouver when
I retire and
head to a town
I will
probably hate
living in.
>
> -The
Defined
Benefit Plan
is a massive
boon to
someone like
me because it
provides me
with what
seems to be a
reasonable and
predictable
retirement
(not to
mention what
seem to be
much improved
health
benefits).
>
> Maybe
others on this
list will see
themselves in
the
description of
me that I have
provided
above. Or,
maybe I’m
unique.
Either way,
that’s me.
And I am
voting for a
switch to the
Defined
Benefit plan.
>
> Best,
> Eugene
McCann
> Geography
> PS as
this is a
‘personal
testimony,’ if
you like, I am
not up for
debating the
ins and outs
of it. I am
throwing it
out here in
case it
resonates with
others. I
offer it as
another
reference
point for
discussion.
If others want
to point out
mistakes in my
reasoning,
that’s fine.
Indeed, I’ll
read them and,
no doubt,
learn. But
please forgive
me when I
don’t respond.
>
>
> On Nov
23, 2018, at
5:17 PM, Steve
Whitmore <whitmore@sfu.ca<mailto:whitmore@sfu.ca>>
wrote:
>
> Thank
you, Lucas,
for adding a
bit of levity
to a complex
and
potentially
divisive
discussion.
>
> I am now
glad that I
never had kids
(a couple
hundred 1st
year students
every year is,
no doubt, an
equivalent
penance for my
sins).
>
> NB. When
housing
started to get
out of control
in the lower
mainland, the
SFU
administration
had the
foresight to
provide
housing (at
20% below
market value)
for
faculty/staff
(i.e., the
Verdant
complex). I
suggest that
the Community
Trust consider
expanding that
policy when
they undertake
future
developments.
>
> Cheers,
>
> Steve
Whitmore
>
> From:
Lucas
Herrenbrueck [mailto:herrenbrueck@sfu.ca]
> Sent:
November 23,
2018 4:58 PM
> To: academic-discussion@sfu.ca<mailto:academic-discussion@sfu.ca>
> Subject:
Re: pension
plan
>
> On the
other hand,
having "too
much
retirement
income"
doesn't mean
you have to
spend it. You
can still give
the remainder
to your kids
and/or
charity. A big
plus: your
kids will have
an interest in
you living
longer if they
benefit from
your pension.
Whereas if
every year
you're alive
you draw on
their future
bequest...
>
> Well, I
couldn't
resist saying
the above but
as a young
faculty I am
definitely
aware of the
constraints of
present
living. I
spent my first
2+ years at
SFU paying
back
high-interest
college loans,
and I would
not have
appreciated
the extra 10%
in pension
contributions.
Stands to
reason that in
the future
more and more
new faculty
will start
with debt. If
you're 50 and
started your
SFU career
debt-free,
please
consider this.
And if we do
move to the
pension plan,
maybe some
other way to
help new
faculty can be
found.
--
Nilima
Nigam
Professor
Dept. of Mathematics
Simon Fraser University
|