So long, pension cap.
The Alberta government has officially overturned a 23-year-old regulation that limited the amount of pension some teachers were eligible to receive.
Part of the regulation accompanying the Teachers’ Pension Plan Act, the cap restricted the total amount of annual pension that could be paid out, which affected teachers retiring with a five-year average salary greater than approximately $103,000. Teachers earning this amount or higher ended up paying for a pension benefit they were not receiving.
ATA president Greg Jeffery said that, in recent years, increasing numbers of school and central office administrators were being affected by the cap.
“This problem has been on our radar for a number of years,” he said. “It unfairly denied teachers the pension benefit to which they were fully entitled.”
The change will come into effect on Jan. 1, 2019. Retroactive payments will not be made; however, all future payments to currently retired members will reflect the changed policy. Approximately 900 affected retired members will have their pension adjusted to the level where it would have been without the cap, including a cost-of-
living adjustment. ❚
Does this affect my pension contribution?
The regulatory change does not represent a pension improvement; it simply resolves a problem that existed for certain members, states a news press release from the Alberta Teachers’ Retirement Fund (ATRF).
Because contribution rates had already been based on the higher expected pension amount, the plan is sufficiently funded to handle this change without a need to adjust current contribution rates.
The ATRF is contacting pensioners affected by the reduction to inform them of the news. A posting with further information is included at www.atrf.com.