APRUO

Association des professeurs retraités de l'Université d'Ottawa
Association of Professors Retired from the University of Ottawa

SURVEILLANCE COMMITTEE OF THE APRUO

PREAMBLE

Examination of the administrative structures of the Pension Plan and of the University reveals that certain persons involved assume a double role. The Association of Professors Retired from the University of Ottawa (APRUO) recognizes a possible source of conflict of interest in this arrangement.  This possibility is based on the following elements.

1) Persons who are members of the Board of Governors, the ultimate authority of the administrative structure of the University, are at the same time principal fiduciaries of the Pension Plan.

2) The objectives of the members of the Board of Governors coincide with those of the administration of the University, that is, to attract professors and researchers of high calibre and to seek the funds necessary for the University to achieve an enviable ranking amidst the university community.

3) In their role as principal fiduciaries of the Pension Plan they must defend the interests of the members of the Pension Plan (employees and retirees) while overseeing the quality of the management of the Plan in all its dimensions. They ensure, notably, equitable sharing of the profits from investments among members of the Plan, maintenance of complete solvency of the Plan, including preservation of sufficient reserves in order to assure yearly payment of the benefits as well as improvement of the financial status of the Plan.

4) The funds of a pension plan are made up of contributions from the employees, contributions from the employer and profits from the judicious management of the capital.  These funds belong exclusively to the members of the Retirement Plan (employees and retirees).  The University has no right of ownership whatsoever.  This declaration is based on the following text : « The current net value of the Pension Plan is the property of the retirees of the University of Ottawa (1965) (« Plan ») actualized by virtue of the Law of 1987 on the pension plans of retirees of Ontario, (Registration Number C003056108)…»   Supplementary Notes to the Financial Status of the Pension Plan of the University of Ottawa, for the period terminating on the 31st of December, 2006.  Note1. Description of the Plan

5) A Defined Benefits Pension Plan carries with it the danger that the persons who act as its fiduciaries while at the same time are governors of the University that is the employer, might slip down a very slippery slope.                                                                                                                                     

Fiscal rules prohibit the employer from contributing to the pension plan so long as an actuarial surplus of ten percent (10%) or more exists.  If the fiduciaries do not initiate steps to distribute the funds to the employees and retirees, the surplus continues to accumulate and the employer continues to save the equivalent of its contribution.  This manoeuvre allows the employer to save funds that can be directed to the objectives of the University to the detriment of the welfare of the employees and retirees.  At the upper level of the administration of the Pension Plan, the individuals are fiduciaries of the Plan at the same time as they are Governors of the University.  This certainly presents a possible source of conflict of interest.

6) Auditors analyze and verify all accounting aspects of the administration of the Pension Plan.  They ensure that operations are in good order, that authorizations and powers of the administrators are respected and pass judgement on the quality of the management. Whereas at the University of Ottawa , the same company of auditors assesses the financial state of the University of Ottawa and the financial state of the Pension Plan.  It appears difficult for us to imagine that the auditors would criticize the persons who are governors of the University and at the same time fiduciaries of the Pension Plan when it concerns transactions that benefit the University but which might deleteriously affect the benefits of the members of the Pension Plan and deprive them of financial advantages emanating from the net balance of the Plan.  These auditors, though honest and of good faith, are in conflict of interest and risk not having the critical sense necessary to safeguard  the interests of the retirees.

7) Moreover, the actuaries base their conclusions on the financial state of the Pension Plan and are not delegated to examine the financial state of the University.  Thus they depend on the results of the work of the examiners.  In addition, they must receive abundant data that are supplied by higher staff who themselves play a dual role in the exercise of their function that is delegated by the employer.  The work of the actuaries consists of a verification and evaluation of all aspects of the Pension Plan.  It is their responsibility to ascertain that the Plan is solvent with respect to long term goals while at the same time considering its administrative costs.

8) The preceding comments and observations in no way place in doubt the integrity of the individuals and their good faith.  The conflict of interest is a phenomenon which risks biassing the judgement of the person without he/she being aware of it.  This conflict situation can easily prevent a person from being aware of the regrettable consequences of certain of his/her decisions which propose action appropriate to the objectives of the University, but which do not uphold the rights of the members of the Pension Plan or which prejudice one or other group of members of the Plan, either employees or retirees.
                                                                                            
The Association of Professors Retired from the University of Ottawa has seen fit to establish its own surveillance committee to fulfill this mandate.                              

MANDATE OF THE COMMITTEE:

The committee has the mandate to ascertain that the administration of the Pension Plan respects the norms and criteria consistent with this sector of activity and to assure that the interests of the members of the Pension Plan, particularly the retirees of the University of Ottawa , are well defended.                                         

FUNCTIONING OF THE COMMITTEE:

The committee studies the questions submitted by the administrative council or the President of the Association of Professors Retired from the University of Ottawa . The latter supplies the necessary documents to the committee members.  The reports and recommendations of the surveillance committee are transmitted to all members of the committee and the president submits these to the administrative committee and to the members of the Association as the case may be.

COMPOSITION OF THE COMMITTEE:

The committee is composed of two retired professors, one former vice-rector, one member of the support staff retirees  and one actuary, and one chartered accountant who are independent of the Association and the University.The President of the Association chairs the committee. The administrative committee of the Association of Professors retired from the University of Ottawa has the option of adding other members depending on need or the mandate that has to be executed.

 President: Viateur Bergeron, retired professor,
 vberger@uottawa.ca
 17, rue Lavallée Gatineau (Québec) J8Z 1N9
 Tel. : 819 771-8614 ; cell. : 819 665-2760
 Fax : 819 778-6544

Members:

Michel Bédard, actuary
mybedard@videotron.ca
588 Martin-Perrier N. Gatineau (Québec) J9H 5P3
Tel.: 819-684-6467

               Claude Dufresne, member of the support staff retirees  
           dufresne@uOttawa.ca
           67, boul. Lionel-Émond, Gatineau (Québec) J8Y 5R6
           Tel. : 819 776-1786

Pierre Bourgault, former vice-rector; retired
phibeta@rogers.com
6385 Roslyn Orléans ( Ontario ) K1C 2Z9
Tel. : 613 841-6574 ; Fax : 613 841-2482

Maurice Jetté, retired professor,
mjette@uottawa.ca
29 Burnham Road , Ottawa ( Ontario ) K1S 1A2
Tel. :  613 230-0595

Jacques Morin, chartered accountant
jmorin@magma.ca
C.P. 503 (55 Cochrane) Gatineau (Québec) J9H 5E7
Tel. : res. 819-684-3839