Union reps fume over Alberta’s move to shift billions of dollars in pension plans

A decision in Alberta’s budget to consolidate public sector pension plans worth tens of billions of dollars into a provincially managed program has union reps up in arms after they say the move was done without consultation.

Alberta Teachers’ Association president Jason Schilling said amid the budget revelations that have emerged from the provincial balance sheet was a move by the province to take over control of $18 billion of their teacher’s retirement fund, as well as pensions controlled by Alberta Health Services and the Workers’ Compensation Board.

The assets are set to be controlled by the Alberta Investment Management Corporation, a crown corporation administered by the provincial government.

“At no point did they talk to us about this — teachers contribute half the money to the fund in the plan,” said Schilling. “By making this decision, it actually takes away our say that we have over the management of those funds.

“I refer to it in my news release as a hijacking, and I think that’s a really good term for it. It’s concerning they would do this without consulting us. There’s a level of respect that should be met when you’re dealing with professionals on matters that are important to them, and this was a highly disrespectful manoeuvre on how to do this.”

In the government’s budget documents, the province explained the move was done to maximize the trio of funds by lowering costs and achieving “significant and necessary economies of scale that will protect the funds and government and protect returns to pensioners.”

“(The) government intends to reverse the option of public sector pension plans leaving AIMCO as a fund manager. Moreover, the Alberta Teachers Retirement Fund, Workers’ Compensation Board and Alberta Health Services will be expected to transfer funds to AIMCO for management, reducing redundant administration,” bureaucrats wrote in the 2019 tax plan, released earlier this week.

In a statement, Treasury Board and Finance spokesperson Jerrica Goodwin said AIMCO is a “reflection of our commitment to make government more efficient,” adding the teachers retirement fund will have “reduced investment costs and, therefore, higher expected investment returns.”

“Making this change eliminates duplication and reduces the cost of investment services,” said Goodwin. “The ATRF board will remain in place to oversee the pension.

“It is not a requirement to notify the ATRF of this change, and it is proposed until the appropriate legislation is tabled and passed in the Legislative Assembly.”

On Saturday, Schilling said he met with local presidents of the association in a regular meeting. There, he said he heard concerns from them, adding he’s also heard from some teachers about the move.

Many, Schilling said, are unsure of what happens next.

“I’ve heard from teachers and there’s a lot of confusion and some uncertainty,” he said, adding he understands the province was bringing forth some form of enabling legislation this week. “We know the decision is to move the management of the funds ... beyond what the impact of what that looks like will be forthcoming in the legislation. We have to wait and see.”

But the teachers aren’t the only ones affected by the move.

United Nurses of Alberta President Heather Smith says $45 billion in pension assets for the Local Authorities Pension Plan has been affected.

Workers’ Compensation Board pensions, too, will be affected.

Smith said they weren’t consulted on the move either, and that they had only recently got control over their pension in March — nearly 28 years after she says it was initially promised.

“It was a real shock,” said Smith. “They’re basically undoing what was done by the (NDP Rachel) Notley government, which was giving us governance over our plan.

“In 1992, the government of the day promised us governance of the plan. That promise was not fulfilled until the Notley government gave us independence ... and we got that independence on March 1 of this year. It was almost 28 years in getting the promise of the day fulfilled, and this government, almost within months, undoes it.”

Part of that was the group still needed to use the management corporation for another five years, Smith added. But much like Schilling, she said the nurses weren’t consulted in advance of the move.

They’re basically undoing what was done by the Notley government, which was giving us governance over our plan.