Teachers in Alberta contribute to the Alberta Teachers’ Pension Plan throughout their entire teaching careers and may also buy back service after an employer-approved leave of absence. It is these contributions, along with matching government contributions, that are invested by the Alberta Teachers’ Retirement Fund. These investments grow over time and give the plan sufficient assets to pay the pensions promised to teachers when they retire from the profession.
Over a 30-year career, a teacher who started employment in 1983 and retired in 2014 would have made contributions of approximately $175,000 and earned interest under the plan of about $62,000, for a total of $237,000.
The provincial government would have contributed almost the same amount as that teacher. Retired in 2014, that teacher would receive an annual pension of approximately $47,000.
Assuming this pension is paid for 30 years (the average life expectancy for a teacher after retirement), this teacher would receive at least $1.25 million in pension. These numbers do not include the 70 per cent (post 1992) cost-of-living allowance that a teacher would receive annually based on the Alberta Consumer Price Index (ACPI). This ancillary benefit, which allows a retired teacher’s pension to keep up with the cost of inflation, is included in the cost of the pension.
The Alberta Teachers’ Pension plan has continued to provide great value and security for teachers in this province and will continue to do so for years to come.