Canadian universities' pension deficits rise to $3.2 billion

February 15, 2012

In a commentary published earlier this week, DBRS Inc., a Toronto-based credit rating agency, weighs in on the growing pension shortfalls at Canadian universities, 13 of which have borrowed debt capital in the public markets. Over the period 2008-09 to 2010-11, "total aggregate unfunded pension liabilities for DBRS-rated universities ballooned from approximately $680-million to $3.2-billion." DBRS broke down the unfunded liability by institution on a full-time equivalent student basis. The 3 largest are the University of Toronto ($20,906), Queen's University ($16,360), and the University of Guelph ($10,687). By contrast, Brock University, Simon Fraser University, and the University of Ottawa have the lowest shortfalls. DBRS notes that some institutions have already taken measures to improve the situation. For example, McMaster University has increased employee contributions and retirement dates, as well as closed defined benefit plans to new entrants of certain employee groups. uToronto has made a $150-million lump sum payment and plans to make a second similar payment by June 2014 into its pension plan. Financial Post