I am writing today about a number of concerns that I and other teachers have in regards to MLA Ron Orr’s article 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 article by stating that the Alberta Teachers’ Association has misrepresented the situation, and then follows with a series of other misrepresentations. I will attempt to address those here, but before that, I would like to begin by stating the general concern of teachers and the Association:
This change was made without any 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, then why would they rush it through the legislature so quickly without reasonable time for discussion and debate?
Most of the claims of the government—as reiterated by MLA Orr—are subject to scrutiny, and that is why 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.
So let’s examine some of the misrepresentations made in MLA Orr’s article. He claims that 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 that the board must invest only with AIMCo. Orr says that ATRF returns only appear to beat AIMCo returns because of different year ends, yet the ATRF numbers had been 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 that these savings will be fully realised by teachers and the government. This is not the case. The costs of the plan are deducted from the returns of the plan—any savings belong to the plan and would essentially be used to fund pensions.
The only way cost 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.
ATA District Representative and Red Deer Public teacher