Our Pension Q & A
Léo Richer | Chair , Pension & Financial Wellness Committee
Lack of information is detrimental at any time ; misinformation is equally damaging . Pension information is no exception , including the ongoing controversy concerning the management of the teachers ’ pension plan in Alberta . To dispense with some of those myths , the Pension & Financial Wellness Committee has compiled a series of Q & A . While most of these questions came from teachers , the information is relevant to anyone with a pension plan .
Q1 . Why is the ATA filing a legal challenge on pensions ?
Documents submitted with the Court of Queen ’ s Bench on March 10 , 2021 , outline how the terms and conditions imposed in Finance Minister Travis Toews ’ Ministerial Order are inconsistent with the Alberta Investment Management Corporation ( AIMCo ) Act and the Teachers ’ Pension Plans Act . The Ministerial Order gives more rights to AIMCo and infringes on Alberta Teachers ’ Retirement Fund ( ATRF ) rights as they are provided in those two pieces of legislation . The Alberta Teachers ’ Association ( ATA ) is also challenging the Government ’ s breach of duty of procedural fairness owed to the association . The above order imposed terms and conditions for the relationship between the ATRF and AIMCo after unsuccessful negotiations to reach an investment management agreement .
Q2 . Does the Alberta Government guarantee teachers ’ pensions ?
No , the Alberta Government has not guaranteed teachers ’ pensions since a negotiated pension agreement was reached in 2007 .
Q3 . Is my pension safe ?
The teachers ’ pension plan is not in debt . Every year , the plan collects more money in contributions than it requires to meet its obligations to current pensioners . Pension benefits accrued since September 1992 are funded as they are earned , and plan assets continue to grow . As of August 2020 , the plan had over $ 19.3 billion in assets . The plan was 82 % funded in 2015 and 96 % funded in 2020 , with plans to be 100 % funded in 2027 .
Q4 . How is the plan funded ?
Our pension fund comes from contributions made by us and our employer — the provincial government — while we were active teachers . These funds are invested for the long term with the view of growing the value of the fund . Over 80 % of our pension is generated from the investment of these funds .
The ATRF board modifies contribution rates , as required , following each actuarial valuation . Contribution rates are set to cover the cost of the plan benefits currently being accrued . This includes the cost-of-living adjustments ( COLA ). Retired members are entitled to receive an adjustment equal to 60 % of the change in the Alberta Consumer Price Index for service prior to 1993 , and 70 % for service after 1992 .
Q5 . Is the ATRF pension a good deal ?
The average teacher lives thirty years after retirement . Most teachers will continue to get more out of the pension plan than they ever put into it . For every dollar that teachers contribute to their pension , they get eight dollars back in retirement . The cost of managing the Teachers ’ Pension Plan is about one-fifth of the cost of investing on your own . Your pension is guaranteed for life and is inflation protected . The risk of lower-than-expected returns is not borne by the pensioner but shared between all contributing teachers and the Alberta Government .
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