The University of Winnipeg has been ordered to pay $8.8 million in outstanding disbursements to members of its pension plan.

The money will be distributed to nearly 600 current and former members of the plan, as originally ordered by Manitoba's superintendent of pensions, according to a press release issued Wednesday by the U of W.

'It's going to be somewhat of a challenge.'—Laurel Repski, U of W

The order was made by the provincial pension commission.

It comes after a long court battle that ended when the Manitoba Court of Appeal last year refused the university's appeal of the original decision by the superintendent.

The payments will be made over the next few months.

Loan will cost $24 million

In order to do so, the university was forced to take out a loan that will end up costing $24 million once it has been paid off.

"It's going to be somewhat of a challenge but the university has made a commitment that we'll be seeking other ways of raising additional revenue," said Laurel Repski, the U of W's vice-president of human resources.

"So, we'll be out there recruiting hard for students. And also we're going to be continuing to examine our operating costs as we have been doing over the last number of years."

The 40-year loan will annually cost the university $600,000.

Deal made in 1999

The issue dates back to 1999 when the university's pension plan accumulated a significant surplus. The university agreed to share it with the members of the plan and began to distribute it.

However, the surplus was wiped out in 2001 when financial markets crashed in the wake of the 9/11 terrorist attacks.

Members of the plan took legal action to force the university to continue paying the money.

Following a lengthy investigation, the superintendent of pensions ordered the university to complete the disbursements even though the funds were no longer available.

The university appealed to the pension commission, which in April 2008, upheld the order.

The university then took its case to the Manitoba Court of Appeal, which denied the appeal in January 2009.