Clarity on changes to Alberta Teachers’ Retirement Fund

Clarity on changes to Alberta Teachers’ Retirement Fund

Many teachers have a number of concerns regarding MLA Ron Orr’s column on changes to Bill 22 that would transfer the assets of the teachers’ pension plan to be managed under the exclusive authority of the Alberta Investment Management Corporation (AIMCo).

Orr begins his column by stating the Alberta Teachers’ Association (ATA) has misrepresented the situation, then follows with a series of other misrepresentations. Before I address those, I want to reiterate the general concern of teachers and the Association:

This change was made without consultation and was enacted very quickly in the face of significant opposition. If Orr and the government believe this change is in the best interests of teachers and the plan, why would they rush it through the legislature without reasonable time for discussion and debate?

Most of the claims of the government—as reiterated by MLA Orr—are subject to scrutiny, so we asked for the government to bring in the auditor general as an independent third party to review the data and the entire proposal. This reasonable request was ignored.

Let’s examine some of the misrepresentations made in MLA Orr’s column. He claims teachers will still have full governance and oversight through the Alberta Teachers’ Retirement Fund (ATRF) board, but this cannot be true if the board cannot choose who to invest their funds with. Bill 22 says the board must invest only with AIMCo. Orr says ATRF returns only appear to beat AIMCo returns because of different year ends, yet the ATRF numbers were adjusted to reconcile differing year ends. Orr says the pension is “government guaranteed,” no matter whether the plan performs well or not, yet the risks of the plan are actually shared equally by the province and by teachers.

The final misrepresentation deserves more scrutiny. Orr says the move is estimated to save $41 million in administrative costs and ties these savings to the Alberta budget. He suggests these savings will be fully realised by teachers and the government. This is not the case. The costs of the plan are deducted from its returns—any savings belong to the plan and would essentially be used to fund pensions.

The only way plan savings become actual savings for teachers and the government is if contribution rates are decreased. So is Orr guaranteeing a decrease in contribution rates for teachers? Furthermore, is he guaranteeing that a contribution rate decrease realised by the government would be reinvested in public education? Does MLA Orr actually have the authority to commit the ATRF or the government to these actions? And if he did, would that then negate the claim that the board retains full oversight of the plan?

The government has never made any such commitments to teachers. Instead the government chooses to reiterate the same talking points—just as MLA Orr has done—while ignoring the genuine concerns and reasonable requests of teachers.

Don Brookwell lives in Lacombe and teaches high school in the Red Deer School District. He is also the elected District Representative to the Provincial Executive Council of the Alberta Teachers’ Association. Mr. Brookwell represents teachers in Chinook’s Edge, Clearview, Red Deer Catholic, Red Deer City and Wolf Creek. He has been a teacher in the Alberta public education system since 1990.