M E M O R A N D U M

March 23, 1999

TO:All Members of the McMaster University Faculty Association on the Career Progress/Merit Plan
FROM:David Hitchcock, Chair, MUFA Remuneration Committee
RE:Joint Committee Remuneration Agreement for July 1, 1999 to June 30, 2002

The enclosed "Text of the Agreement" on faculty remuneration reached by the Joint Committee describes the remuneration items to which we agreed and outlines the timing of our receipt of them. Your negotiating team (Les King, John Platt and myself) believes that it is useful to explain the items, to help you understand the Agreement better. You can get further explanation at an Information Session on March 31, 1999 (at 2:30 p.m. in MGD 505), at which all six members of the Joint Committee will be present to answer your questions. I hope to bring to that session the support of the Faculty Association's Remuneration Committee and of its Executive for the Agreement.

CAREER PROGRESS/MERIT AWARDS:

The Career Progress/Merit (CP/M) Plan is the negotiated framework for recognizing our progress through our careers at McMaster -- a "ladder" up which our salaries move. The rate at which they do so is determined by our current salary, our merit rating for the previous calendar year, and the floor salary for an assistant professor. The annual CP/M award is highest for lower-paid faculty and lowest for the highest-paid faculty (given the same merit rating). In the last six years, our CP/M awards have been either lower than usual (110 rather than 120 par units per 100 faculty), or delayed, or both. The top priority of your negotiating team was to have CP/M awards paid at the usual 120 par units per 100 faculty (not the 110 par units used for merit years 1992 through 1995); and to have them paid on July 1 (not 6 months to 3 years late). We achieved that objective. For the first time since 1992, McMaster faculty members are to receive CP/M awards valued at 120 par units per 100 faculty on July 1 -- in each of the three years of the Agreement.


ACROSS-THE-BOARD INCREASE:

The other main mechanism at McMaster for increasing faculty salaries is an across-the-board (ATB) increase, given (usually on July 1) as a percentage of base salary at the end of June. The annual ATB increase is designed to protect the salary scale against erosion by inflation; it keeps the CP/M ladder from sinking into the ground. In the past six years the ladder has sunk quite a bit; we have had no ATB increases since 1992, and we even had one ATB decrease (of 0.5%, in 1994). Under the terms of the previous agreement, we will receive on May 1 of this year our first ATB increase in almost seven years, an increase of 1%. The second priority of your negotiating team was to get in this next agreement an ATB increase which was greater than the rate of inflation, to start pulling the ladder of our salary scale out of the ground. We came close to achieving that objective. In the first year, there will be an ATB increase of 1.25%, which is one-quarter of a percentage point greater than the rate of inflation as traditionally measured in these negotiations (the December-to-December increase in the all-Canada Consumer Price Index, which was 1.0% between December 1997 and December 1998). To accommodate budgetary constraints, this increase is to take effect on November 1, four months later than usual. The administration was unwilling to tie ATB increases in the second and third year of the Agreement explicitly to the Consumer Price Index, because it was important to their forward planning, especially about faculty renewal, to have certainty about faculty salaries. Also, for budgetary reasons, they wanted the increase in the first year to be no greater than that in the third year. And, for various reasons, they wanted to restrict the total ATB increase over the three years to 3.0%. The result was the "saddle-shaped" pattern of ATB increases: the increase in year 2 of the Agreement is only 0.5%, which will probably be less than the rate of inflation (currently forecast to be around 1%). It does however take effect on July 1, so that it will affect the value of the CP/M awards in that year. In the third year, the ATB increase is 1.25%, which is likely to be close to the rate of inflation; it takes effect on October 1, three months later than usual, again for budgetary reasons. Thus there are across-the-board increases in each of the three years of the Agreement, higher than the rate of inflation in the first year, delayed by four months in the first year and by three months in the third year, totalling 3.0%.


ADJUSTMENT OF THE CAREER PROGRESS/MERIT PROFILE:

The Career Progress/Merit (CP/M) Plan requires that the salary floors for each rank, the value of a par increment, and the three breakpoints in the Plan are increased annually by the across-the-board (ATB) increase. The following table displays the resulting increases during the three years of the proposed Agreement:

Career Progress/Merit Profile 1998 through 2001
July 1, 1998 July 1, 1999 July 1, 2000 July 1, 2001
Range 1 < $75, 892.43 <$76,651.35 < $77,992.75 < $77,992.75
Par value in range 1 $2,262.05 $2,284.67 $2,324.65 $2,324.65
Range 2 $75,892.43 to $92,857.72 $76,651.35 to $93,786.30 $77,992.75 to $95,427.56 $77,992.75 to $95,427.56
Par value in range 2 $1,696.54 $1,713.51 $1,743.50 $1,743.50
Range 3 $92.857.73 to $98,512.82 $93,786.31 to $99,497.95 $95,427.57 to $101,239.16 $95,427.57 to $101,239.16
Par value in range 3 $1,131.03 $1,142.34 $1,162.33 $1,162.33
Range 4 > $98,512.82 > $99,497.95 > $101,239.16 > $101,239.16
Par value in range 4 $565.51 $571.17 $581.17 $581.17
Salary floors: lecturer $33,871 $34,210 $34,809 $34,809
Assistant professor $41,961 $42,381 $43,123 $43,123
Associate professor $54,243 $54,785 $55,744 $55,744
Professor $68,671 $69,358 $70,572 $70,572

If your CP/M award takes your salary across a breakpoint in a given year, the par value will be a weighted average of the par values in the two salary ranges.


ONE-TIME PAYMENTS:

Your negotiators were especially concerned about the depressed earnings over the last six years of lower-paid faculty members at the beginning of their careers. We proposed to compensate for the low ATB increase in year 2 of the Agreement by addressing the problem of foregone earnings due to delays in payment of CP/M awards in the last four years, relating to merit years 1994 through 1997. The Agreement provides for lump-sum payments, proportional to those lost earnings, totalling $250,000. The lump-sum payment, to be included in your pay cheque on July 15, 2000, will average about $360, or about 0.4% of annual salary. But it will be much greater for the lower-paid faculty who have been at McMaster since 1994 or earlier. Given equal merit ratings for the four years, you will receive four times as much if your salary was below the first breakpoint in the CP/M plan (about $76,000) than if it was above the third breakpoint (about $98,000). To sum up, each of you whose CP/M award was delayed in the last four years and who will still be at McMaster in July 2000 is to receive a lump-sum payment on July 15, 2000, as partial retroactive payment of the amount lost by the delays in receiving your CP/M awards; the amount will be much higher for the lower-paid faculty, especially those with high merit ratings.


MODEM POOL FUNDING:

The next objective of your negotiators was to preserve and if possible enhance the funding of access to the University's Enhanced Modem Pool. The present arrangement is that $20,000 is added each year to a fund from which such access is paid for; the Joint Committee sets a limit of the maximum amount to be paid for a given faculty member on the basis of the experience of the fund. At present, the limit is $100 per faculty member per year. We achieved the objective of preservation, but no enhancement. The Agreement provides for the same allocation as at present, $20,000 a year, to a fund supporting faculty access to the Enhanced Modem Pool, subject to an annual maximum for each faculty member to be determined in the Joint Committee.


PENSION CONTRIBUTION HOLIDAY:

The next priority of your negotiators was to maintain and if possible enhance the present 50% contribution holiday, which is worth about 2% of your salary. We were aware of concurrent negotiations in the McMaster University Ad Hoc Committee for Retirement Provisions for Salaried Employees, in which employee contribution holidays are under active discussion. Although those negotiations have not yet concluded, the outline of a comprehensive set of improvements funded by the present large pension surplus is becoming clear, including a very attractive change to the method of employee contribution to the McMaster Pension Plan. In our negotiations about faculty remuneration, the administration was unwilling to agree to our proposal for a 100% pension contribution holiday. We therefore settled for continuation of the present 50% contribution holiday, with the proviso that any subsequent agreement that affects employee pension contributions will supersede it as of the implementation date of the new agreement. Until a new agreement on pension contribution holidays is reached, you are to continue to receive a 50% holiday, worth about 2% of your salary.


PROFESSIONAL DEVELOPMENT ALLOWANCE:

Our next priority was to get the Professional Development Allowance (PDA), currently $1,259 a year, indexed by the rate of inflation. This allowance, which pays for such professional expenses as book purchases, journal subscriptions, professional society memberships and conference attendance, is comparatively generous among Ontario universities. We wanted to make sure that its value was not eroded by inflation. The administration was unwilling to explicitly tie increases to the PDA to inflation, in order to avoid uncertainty about its costs, but it did agree to increase it by 1% in each of the three years of the Agreement, which we expect will about cover the rate of inflation. The value of your Professional Development Allowance is to increase by 1% in each of the three years of the Agreement.

SUMMARY:

We achieved, or almost achieved, all our top priorities. Further, the payment of CP/M awards and ATB increases has moved much closer to the traditional pattern, after the disruptions of the last six years. We think that the present Agreement is about as good an agreement as possible from the Faculty Association's point of view, given the administration's budgetary constraints (caused by government funding policies) and priorities. We also think that the Agreement is about as good as possible from the administration's point of view, given the Faculty Association's priorities and the context of negotiations.

We encourage you to attend the information session to discuss the Agreement on Wednesday, March 31, 1999, at 2:30 p.m. in MGD 505. At that session, all six members of the Joint Committee (the administration's negotiators as well as your negotiation team) will be present to answer any questions you have about the Agreement.

We urge you to complete and return the enclosed ballot by the deadline of April 7, 1999, so that the results of the voting will genuinely reflect the opinion of the membership.