Important news from Alberta Teachers' Retirement Fund Board

November 1995

Effective September 1, 1995, the Teachers' Pension Plans Act replaced the Teachers' Retirement Fund Act, originally passed by the Alberta government almost five decades ago. The new Act establishes the foundation for the modernization of the teachers' pension legislation which includes Regulations and Plan Rules. The new legislation establishes two separate pension plans, the Teachers' Pension Plan and the Private School Teachers' Pension Plan.

By passing this legislation, the Government of Alberta committed to continuing the funding arrangement agreed to in the 1992 Memorandum of Understanding (MOU) between the government and The Alberta Teachers' Association. Government and teachers will each continue to pay 50 percent of the normal cost of the pension plan. Cost-of-living adjustments (COLA) will continue to be granted in the same proportion as was decided in the MOU, with teachers paying the full cost of enhanced COLA. The government will continue to pay 67.35 percent and teachers 32.65 percent of the cost of eliminating ATRF's unfunded liability.

The six-person Board, appointed by the Lieutenant Governor in Council, continues to be the trustee and administrator of the plans and custodian of the funds. New arrangements for making or amending plan rules provide appropriate safeguards for both government and teachers by building informal consultation and negotiation requirements before changes to a plan's design can be initiated.

The Board selected Alberta Teachers' Retirement Fund Board as its new name and the name of the corporation. Its acronym is now ATRF. Documents are being revised to reflect the new legislation and the new corporate identity.

The Board has appointed a Review Committee to review decisions made on the Board's behalf by ATRF staff in the administration of the legislation. In accordance with the MOU, the Review Committee may review a request by a plan member to change the form of pension selected within six months after pension commencement if circumstances existed in which the member could not be expected to make an informed and rational decision at the time of the original choice or deemed choice.

ATRF members may now purchase any period of Employer-Approved Leave of Absence, including Sabbatical and Educational Leaves, Parental (Maternity, Paternity, Adoption) Leaves, and General Leaves. Old rules regarding salary and courses no longer apply. The employee must have accrued ATRF pensionable service immediately prior to the leave, and application to purchase the service must be made while accruing ATRF pensionable service.

All service purchases are at actuarial cost. Payments will be accepted for a minimum of one-half year's service, the entire amount, or any amount when the purchase application is made in conjunction with a pension application. Purchases of substitute service rendered since May 1, 1971, may be made by inactive or contributing active members in 200-day blocks, or in any amount if application is made in conjunction with an application for pension. The cost of such purchases is subsidized by the provincial government. Contributing active members may buy any amount of past substitute service at any time, but at full actuarial cost.

Know your options

There are now seven pension options available: four Single Life pension options and three Joint Life and Last Survivor options. Three of the Single Life pension options have guarantee periods, and Beneficiaries must be designated. Five-year guarantee periods were added to the three remaining Joint pension options, requiring that both a Joint Nominee and Beneficiary(ies) be designated.

A member may change a pension election if the application to change is received by ATRF no later than 30 days following the end of the month in which the first pension payment is made. A member may cancel an ATRF pension application within 60 days of having received the pension alternatives.

If a pension election is not made within 60 days after the alternatives are sent, a member who has no spouse will be deemed to have chosen the Single Life, Guaranteed Five Years pension option, and a member who has a spouse will be deemed to have chosen the Joint 100/60, Guaranteed Five Years pension option. An ATRF pensioner who has elected a Joint Life and Last Survivor pension option may not change the designated Joint Nominee after pension commencement. However, (s)he may change the designated Beneficiary(ies) at any time before the expiry of the guaranteed period.

The Old Age Security Advance offered by ATRF was discontinued. However, ATRF pensioners already receiving the OAS Advance (and paying the Reduction from age 65) will continue to do so. ATRF still offers the Advance on Canada Pension for those eligible to receive it.

ATRF pensioners returning to teach for an ATRF employer may do so for up to 0.6 of a year of service in ATRF's fiscal year (Sep 1–Aug 31) with no effect on their ATRF pension. If they teach beyond the limit, ATRF must reduce their pension by the amount of their salary. These teacher/pensioners do not acquire pensionable service and should not make contributions to ATRF. Therefore, it is important that they advise their employers of their ATRF pension status to ensure that no contributions are deducted from their salaries.

ATRF will continue to divide a pension in pay upon marriage breakdown if specifically ordered to do so in a court-filed document. All members who file court orders must ensure that the order makes specific reference to the Teachers' Pension Plans Board of Trustees since that is ATRF's official name for use on all court documents.

ATRF termination benefits, applied for upon termination of contract, will be processed as soon as ATRF receives all the required documentation. The four-month waiting period is no longer required. As before, a member is not entitled to an ATRF termination benefit within one year of having received such a benefit.

For more information, contact the Alberta Teachers' Retirement Fund Board at 500 Barnett House, 11010-142 Street NW, Edmonton AB T5N 2R1; Telephone: 451-4166 or toll free 1-800-661-9582; fax: 452-3547.