Unless the territorial government grants a $1.2-million request to cover a pension shortfall, Yukon College may have to consider cutting existing programs.

The shortfall, according to college president Sally Webber, is due to a solvency deficit determined after conducting an acturarial review required under the Office of the Superintendent of Financial Institutions (OSFI) regulations.

According to the Bank of Canada, solvency deficits are discovered when an institution conducts a solvency assessment of its private pension funds.

Bank information states that if a solvency assessment shows a private pension fund to have a deficit, that deficit must be eliminated in no fewer than five years by the organization making additional payments to cover the shortfall.

Solvency deficits, according to the bank, have become common for many institutions in Canada and 'can pose hardships for sponsoring institutions ... (and) can ultimately force a firm into bankruptcy.'

Webber said the college is in this position due to the current investment market. The overall health of the pension is not in doubt, she added, and the payments were required to bring the institution in line with OSFI regulations.

'The good news story is our pension plan is very healthy on a going-concern basis. That is, given the pattern of retirement ... it is in a surplus position.'

The bad news, Webber added, was that the college had to come up with an additional $300,000 a quarter to cover the solvency deficit on top of its regular ongoing $600,000-a-year employer contribution to the fund.

'Under the rules of OFSI, we have to pay substantial money to address the solvency deficit,' said Webber, who will leave the college next month after serving 12 years as president.

According to Yukon College May 2005 reserve fund figures, the college had about $2.8 million in reserve funds to cover a variety of things, including: equipment replacement, human resource contingencies, lease obligations, program development, first nation programs and new facility construction.

Webber said the college did have discretionary funds in its reserves to cover the pension shortfall of approximately $500,000, but that those reserves have been depleted. The college will have to consider carving into its operating budget to cover the shortfall if the Yukon government doesn't step in and render assistance.

Any increases in the employer contribution to the fund, Webber added, in addition to funding the shortfall would put additional stress on college budgets.

'On top of the solvency issue, we also have the normal employee contributions to the plan which would be paid in a normal situation. The deficit in the longer run will change, but the ongoing requirements of paying into the fund don't,' she said.

'Any increase in our contribution comes out of our operations. So, we've asked the government for assistance with both.

'We've been in negotiations with them (the government) for a year ... it's our understanding that we will be hearing from them very soon.'

Dipping into the operating budget, she said, could affect programming at the college, which has occupied its Whitehorse campus for 18 years.

In an interview Wednesday, Premier Dennis Fentie said his government is well aware of the situation at the college as well as a similar one at Whitehorse General Hospital.

Fentie said the government will indeed be stepping in and made that commitment last year.

'As far back as March, the government committed to helping both Yukon College and the hospital,' Fentie said.

'The government will assist them.'

In a March 23, 2005 press release, Fentie said the government had been approached by both the college and the hospital about the pension fund problem.

'We've been approached by both the college and the hospital to help them address some serious deficits in their pension funding.

'We want to assure employees that we will be working closely with both organizations to preserve the integrity of their respective pensions,' he said.