A government ministerial order that reduces teacher control of their pension plan’s investments is unreasonable and should be declared invalid by the courts, argues a legal application filed by the Alberta Teachers’ Association.
Documents submitted with the Court of Queen’s Bench on March 10 outline how the terms and conditions imposed in Finance Minister Travis Toews’s order are inconsistent with the Teachers’ Pension Plans Act and how a duty of procedural fairness owed to the Association was breached.
Signed on Dec. 23, Toews’s order imposed an investment management agreement on the Alberta Teachers’ Retirement Fund (ATRF) and the Alberta Investment Management Corporation (AIMCo). This came after negotiations failed to reach an investment management agreement. ATRF has indicated that AIMco advised in mid-November 2020 that it was ceasing negotiations. Negotiating an investment management agreement was part of the transfer of investment management control imposed by the government’s Bill 22 in 2019.
An affidavit signed by ATA president Jason Schilling outlining teachers’ objections and the lack of consultation around the entire transfer process was also submitted for filing with the courts.
“Teachers were very concerned that investment management for their pensions was required to be transferred from ATRF to AIMCo with no option by ATRF to select other investment managers,” reads the sworn affidavit.
“Teachers were also concerned that this decision was made without any consultation with the Association, when teachers make more than half of the contributions to the fund. Pension benefits for services after 1991 are not guaranteed by the government, so teachers bear half the risk of any shortfalls or deficiencies.”
The application indicates that the government established a reasonable expectation for consultation before decisions were made about an investment management agreement when it repeatedly made representations that the ATRF would retain control over the investment policy and pension funds. The ministerial order provided AIMCo with veto power over the ATRF’s investment policy.
In the application, the Association requests that the case be heard on an expedited timeline, as the transfer of pension asset management has already begun and must be completed by the end of 2021. The Association is also seeking an order from the courts prohibiting the transfer of additional assets until an investment management agreement is negotiated between the ATRF and AIMCo or a valid ministerial order is enacted.
No date has been set yet for the matter to be heard. ❚