I have sat on the ATA Pension Committee for the last two years, and this year I am honoured to serve as chair. The committee’s duties include “[t]o study and monitor all pension issues of concern to the Association.” The committee is made up of two district representatives, four field members, and representatives from the Alberta Teachers’ Retirement Fund (ATRF) board and the Alberta Retired Teachers’ Association (ARTA).
Each year the Pension Committee receives presentations from ATRF on various topics: service to members, the annual report, plan performance, and most recently, responsible investing. The ATRF also presents to the Annual Representative Assembly (ARA). Through Pension Committee members and ARA representatives, teachers have a direct line to ATRF and how their plan is managed. ATRF is a member of the United Nations Principles for Responsible Investments, the Carbon Disclosure Project (a global initiative to encourage companies to publicly disclose information on risks associated with greenhouse gas emissions, water, deforestation) the Canadian Coalition for Good Governance and the Pension Investment Association of Canada.
Our plan is currently in great shape thanks to the expert oversight of the ATRF board and the 2007 resolution of the pre-1992 unfunded liability (caused by the government not contributing its share to the plan from 1956–1992). The board is made up of appointees — half are appointed by teachers, half by the government. This joint governance structure has been in place since our plan was first created back in 1939.
Buried deep in the government’s recently announced budget is a decision to transfer ATRF’s assets (about $18 billion) to the Alberta Investment Management Company (AIMCo) for investing by December 2021. AIMCo invests government money such as the Heritage Fund and some other pension plans. The same decision also prevents the other pension plans from leaving.
This decision was made without consulting either the ATRF or the ATA. This lack of consultation was disrespectful. The hijacking of funds is concerning. Why mess with a plan that is working so well for both teachers and the government? What are the motives behind this move?
On Monday the government introduced legislation — Bill 22. Even before the bill was announced, the government gave notice to invoke closure, limiting debate. By the time the bill had passed, they’d used closure at each of the three stages of debate.
I am concerned that AIMCo does not produce the same excellent returns as ATRF. The replies that teachers have received from MLAs to personal emails or after visiting the website handsoffmypension.ca state that AIMCo will generate $500 per teacher through cost savings and economies of scale, and also that AIMCo has performed better than ATRF. These are very different numbers than those provided by ATRF. Requests asking where this data comes from have been met with silence.
For every dollar retired teachers receive in pension, 75 cents comes from investments, 12.5 cents from the government and 12.5 cents from individual teachers. If the plan does not keep producing decent returns, teachers and the government will need to pay more.
My second concern is that ATRF is a pension company, whereas AIMCo is an investment company. ATRF has a fiduciary responsibility to plan members. It exists to nurture and protect your pension. It can directly tailor investments to match our pension liabilities. It is involved in many private investments and real estate deals that produce excellent returns for plan members that are not readily going to be improved by economies of scale.
My third concern is that AIMCo is, in theory, at arm’s length from the government. But the act gives the finance minister, who is president of the Treasury Board, the power to issue directives to AIMCo, and AIMCo must comply. Teachers who are worried that their pension will be used to fund government projects that might not produce the same returns are not being alarmist. It is a real possibility. Any shortfall in returns is made up by increased contributions. And we would not be able to fire AIMCo for these lower returns.
If this is such a good deal for teachers, why invoke closure? You should have debated the issue. You should have had the auditor general investigate. You should have shown us the independent data. This is our money. You should have let us as teachers, as cogovernors of our plan for 80 years, choose what is best for our future. ❚
Katherine Pritchard is the South West district representative and teaches at Noble Central School in Nobleford.