Breaking Down Our New Salary Settlement

To help clarify some of the implications and motivations of items in the new salary settlement, our chief negotiator has provided some commentary. Here is the full text of the agreement with annotations in italics.

The University of Waterloo and the Faculty Association of the University of Waterloo hereby agree to the following salary settlement:

1. 1. Term of agreement: 1 May 2018 to 30 April 2021 (three years).
   2. Scale increase:
      • effective 1 May 2018   2.00%
      • effective 1 May 2019   2.15%
      • effective 1 May 2020   2.15%
   3. Effective 1 May 2018, an across the board adjustment of $850 per faculty member shall be applied to base salaries following the scale increase stated above.
   4. The vice president academic and provost (VPAP) and the president of the Faculty Association of the University of Waterloo (PFAUW) will together establish a working group that will investigate the existing salary structure (floors and thresholds) and recommend adjustments to the structure to promote equitable influence of the selective increase system on relative career salary progression of lecturers.
      

      The current salary structure, Article 13 of our MOA, was introduced some 18 years ago. The previous structure had very high performers ending their careers within perhaps $1000 of an average performer. The aim of the new structure was to get rid of this compression at the top end.There were not many lecturers before 2002 so not an awful lot of thinking went into setting thresholds for lecturers.

      Once the structure for profs was agreed on, there was historical precedent to set the floor for lecturers at a particular fraction, and a decision was made to use the same fraction to set lecturer thresholds.

      But we have two components to our salary, a multiplicative one (the scale increase) and an additive one (the merit) (see the salary structure explanation on our website). Since only scale affects thresholds, the current system has lecturers reaching the thresholds much earlier in their career than professors.

      This inequity has been identified but a final solution has yet to be crafted. The previous Memorandum of Settlement generated a similar working group around salary anomalies and it worked very well.

      The working group will start their work by 1 March 2018, report to VPAP and PFAUW by 1 November 2018, with the recommended changes implemented retroactive to 1 May 2018.

      It is wise to fully investigate solutions to this inequity, but equity is not delayed: all changes will be retroactive to 1 May 2018.

   5. The University shall increase its annual contributions to the employee health and dental care benefits plan for the benefit of Faculty by $400,000 (all-in costs inclusive of taxes and fees, corresponding to a notional additional ~$325 per non-retired faculty member, with a focus on broad participation).
      

      Article 10.2 of the Memorandum of Agreement says “The Memorandum of Settlement may also include an amount for proposed changes in benefits defined in University Policies and/or administered by the Pension and Benefits Committee. If the proposed benefit changes are not approved, the negotiated amount shall be awarded as a scale change.” This is the first time we have exercised that clause.

      It should be pointed out that our pre-retirement benefits have been poorly ranked in the 2005 and 2012 benchmarking exercises (see p.11 of this P&B meeting package).

      The ~$325 is something like a 15% increase, given that the University’s average cost for employee health and dental plans per eligible employee or retired employee in the fiscal year 2016-17 was $2,147.

      Although the additional contribution will be made 1 May 2018, the deadline date for implementation of the benefit change is 1 January 2019 to correspond with the beginning of the benefit year, and to allow the time necessary for the Pension and Benefits Committee to implement in accordance with its existing principles.

      Unlike faculty at some other institutions, we do not negotiate the benefits themselves. These are decided by a committee of the Board with broad representation. See this resolution of the Board of Governors to learn more about this committee.

   6. The VPAP and PFAUW will together review the unspent funds in the Faculty Professional Expense Reimbursement (FPER) allocation annually during this settlement period beginning May 2018 (corresponding to the end of the first full period of the three year benefit carry forward model implemented in 2015).
      

      At the end of the fiscal years 2013 to 2015, there was roughly $250,000 unspent FPER. Fun fact: about 90% of people eligible to use FPER use it. Starting in fiscal year 2016, we are all allowed to carry our unspent FPER forward. So this coming May will see the first balance of the FY2016 FPER pool. This balance will now be monitored.

      They will develop a process, consistent with the size of the unspent pool, to direct the deployment of these funds to support faculty service, scholarship, research, and teaching.

      Should this balance be significant, we believed this money should be reallocated to support faculty members’ work. There is also a chance this balance could be insignificant (there could be more uptake now that there is a longer period to use FPER). Hence the language has been crafted to provide flexibility.

   7. The option to exchange one week of vacation allowance for a one-time 2% increase in salary when within three years of retirement is extended to 30 April 2027 for retirement on or before 1 May 2030 (see Memorandum of Agreement, Article 11.4)
      

      Extending the deadline for allowing the exchange is a routine matter. It has been pushed five times now since the initial creation of the MoA article.

      As per Article 10.4 of the Memorandum of Agreement, this Memorandum of Settlement becomes part of the Memorandum of Agreement, and is binding on the Board of Governors, the Association, and individual Members.