Some teachers have been very concerned about changes to the Alberta Teachers’ Retirement Fund (ATRF). Some have written to my office with some very disrespectful emails – which I will not repeat – while others came to my office to discuss this in person and I thank them.
I’d like to take this opportunity to explain what actually happened.
Bill 22 is a budget implementation act; a budget meant to get Alberta’s spending under control. The bill mandates the ATRF to use the Alberta Investment Management Corporation (AIMCo) as its investment manager.
The teachers’ union has been misrepresenting this by claiming that government had taken over the teachers’ pensions. In reality the change applies only to the professional investment managing partner for the funds. The teachers still retain 100% ownership of the funds and through their board will have full governance and oversight of their plan and investments.
Further, they have a 100% defined benefit plan. For those that don’t know, this means that every teacher will get paid a government guaranteed pension until the day they die; no matter if the pension plan performs well or not.
Their union told them that the ATRF managers had higher returns than AIMCO.
That is very debatable; it only appears this way because the ATRF reports on a different year-end than AIMCo. Their returns are actually quite comparable, and AIMCo often out-performs the ATRF.
Albertans’ elected us to get our spending under control and balance a runaway budget.
Moving the ATRF under the investment management of AIMCo is estimated to save $41 million in administration costs annually.
Savings like this are in all Albertans’ interests. The $20 million saved by teachers will reduce their contribution rates, and the $20 million saved by government, as the employer, will be freed to fund Education more completely (don’t teachers care about that?).
Are teachers being singled out? No, every other public sector pension in Alberta has AIMCo as an investment management partner. All these plans are doing very well and so will the teachers’. Regardless, teachers still have a guaranteed plan, for life, no matter who manages it.
This change is part of our government’s efforts to manage our finances more efficiently and effectively – and this move does just that.
-Submitted by Lacombe-Ponoka MLA Ron Orr