Reverse Alberta's Public Pension Changes?

Jun 09 22:06 2020 Print This Article

Janet French of CBC News reports that an opposition bill seeks to reverse public sector pension changes in Alberta:An Opposition MLA is attempting to reverse changes the Alberta government made last year to the control of several public sector pension plans.NDP MLA and labour and immigration critic Christina Gray tabled a private member's bill on Monday that also seeks to halt cabinet ministers from withdrawing Alberta from the Canada Pension Plan — a proposal floated by Premier Jason Kenney."Albertans are very concerned about making sure that they can rely on that retirement, particularly now during the pandemic with the economic uncertainty that is happening," Gray said in a Friday interview."Albertans want to know that their money they have earned through a lifetime of contributing to their country will be there for them when they retire."In its inaugural October 2019 budget, the United Conservative Party government said changes were coming to the oversight and investment requirements of four major public sector pension plans.Government backs AIMCoFinance Minister Travis Toews said in the legislature on Monday the government has confidence in AIMCo. He said every pension manager in the world has been hit this year by an economic downturn resulting from the COVID-19 pandemic. The corporation has exceeded its benchmarks in eight of the last 10 years, Toews said. In a Monday email, Toews' press secretary, Jerrica Goodwin, said government wants to consolidate pension management with AIMCo to achieve "economies of scale." "AIMCo's size enables it to participate in sophisticated investment opportunities, such as international private equity and real estate investments, that are difficult for some smaller investment managers to access," she said.Government has no intention of changing its mind, she said. The minister had not reviewed Gray's bill as of Monday afternoon.Gray's Bill 203, tabled in the legislature Monday afternoon, would reverse the UCP's pension changes and require that a current or future government consult with pension holders before making future changes to the plans' administration."The UCP, the party of the free market, is choosing to force all Albertan pensioners to use AIMCo rather than allowing them the opportunity to have competition within the market," Gray said at a Monday press conference. "They are creating a monopoly."If passed, the Pension Protection Act would also halt Alberta withdrawing from CPP.Pulling Alberta out of the CPP and creating a provincial pension plan was one of the ideas considered last fall by the Fair Deal panel. The group of MLAs and other Albertans was tasked with holding public hearings and studying ways for Alberta to seize more autonomy from Ottawa. Their report has been submitted to the government, but not yet released.Gray said the panel floated the idea before Albertans without presenting information about merits or risks of a switch.In the legislature, Toews said the government would put the question of a provincial plan to Alberta voters in a referendum if ministers believe the idea is worth pursuing.Three retired teachers opposed to changes to their pension plan also spoke at the NDP's Monday press conference. 'Beyond outrageous'Retired Sherwood Park teacher Dianna Millard said the change without consultation is anti-democratic."I feel powerless and vulnerable," she said. "We're not being listened to and there's no justification for this to be happening at all."Retired Edmonton teacher Dolaine Koch pointed to an ATRF analysis released earlier this month showing the teachers' pension fund would have been worth $1.3-billion less if managed by AIMCo between 2013 and 2019.She said when she tried to meet with her MLA about her pension concerns, he told her she could vote for an opponent during the next election if she was unhappy.Lin Zurawell, a retired teacher from Sherwood Park, said she feels as if the government is reaching into her savings account without her permission and reallocating her money."It's beyond outrageous," she said. "It's terrifying. When your pension is your single source of income, it's terrifying to think that your government can manipulate it this way."Toews said Monday all public sector pension plans are fully funded, and their money is safe and secure.Previously, cabinet ministers have said switching investment management of teacher pensions to AIMCo would save both taxpayers and teachers millions of dollars each year in fees.Private members' bills go before an all-party legislative committee before being debated in the legislature. The committee, which has a majority of government members, can opt to recommend the legislature not consider the bill.The NDP has launched a website to collect stories from Albertans concerned about pension changes. Submissions are automatically emailed to committee members in an attempt to pressure the committee to allow the bill to proceed to the legislature.I strongly doubt this private members' bill will get past the legislative committee and even if it does, it will be quashed in Alberta's legislature.There are a few things happening in Alberta which are confusing teachers so let me be clear in my thinking below:

Read More

About Article Author

Pension Pulse

Leo Kolivakis is an independent senior economist and pension and investment analyst with years of experience working on the buy and sell-side. He has researched and invested in traditional and alternative asset classes at two of the largest public pension funds in Canada, the Caisse de dépôt et placement du Québec (Caisse) and the Public Sector Pension Investment Board (PSP Investments). He's also consulted the Treasury Board Secretariat of Canada on the governance of the Federal Public Service Pension Plan (2007) and been invited to speak at the Standing Committee on Finance (2009) and the Senate Standing Committee on Banking, Commerce and Trade (2010) to discuss Canada's pension system.

Related Items

Top Funds' Activity in Q1 2020

Jason Orestes of The Street reports Amazon is clearly what hedge funds are betting on these days:Amazon has been a major beneficiary of the Covid-19 chaos, and hedge funds have taken notice.The fastest bear market in history saw a 30% plummet followed by a rapid 30% rebound. But there has been a l ...

CPPIB Gains 3.1% in Fiscal 2020

Pete Evans of CBC News reports CPP adds $17 billion to assets now worth more than $409 billion despite the pandemic:The Canada Pension Plan earned a return of 3.1 per cent after expenses during the financial year ended March 31, the board that manages the fund's money reported Tuesday.Net assets fo ...

CAAT Pension Plan Gains 16% in 2019

Yaelle Gang of the Canadian Investment Review reports that CAAT pension plan returns 16% in 2019, well-positioned to weather coronavirus storm:The Colleges of Applied Arts and Technology pension plan saw a strong 2019, delivering a 16 per cent return, net of investment management fees, while growin ...

Market Update: Investors Optimistic as Global Economies Reopen

The quickest bear market in the history of the US S&P 500 turned into the best 50-day bull market rally in history in May. By market close on June 3, 2020, the S&P 500 Index was up 37.7% from its March 23, 2020 low. This bullish investor sentiment has been based on the continued decline in new coro ...

5 from 5i: Shopify displaces RBC to become Canada's most valuable company

Weekly stock market update & five stock related articles we thought were a must-read this week ...

Repeat After Me: The Market is Not the Economy

The phrase is a cliché but has never been truer. Meanwhile, headline return numbers for an index are offering less and less signal for investors. ...

IMCO's Big Stake in Apollo's New Fund

Christine Idzelis of Institutional Investor reports that Apollo took just two months to raise a credit fund that seeks to profit from tumultuous markets — and it got a swift and significant contribution from Canadian pension manager IMCO:When Apollo Global Management approached the Investment Man ...

US Public Pensions Less Than 60% Funded?

Steffan Navedo-Perez of Chief Investment Officer reports that Goldman Sachs estimates public pensions are now less than 60% funded on average: Average funding ratios for public pension funds have declined to 60% and below, down from 74% before the crisis, according to Goldman Sachs Senior Pension ...

Gold About To Breakout $1800

It was 2008 and we were in the middle of the Great Financial Crisis.  At the time I was working as a math teacher with a small family.  I was already investing in junior gold miners for 10 years before I took the plunge to go full time into becoming a mining entrepreneur leaving a secured tenure ...

Don’t write an obituary for shipping’s dirtiest fuel

High sulfur fuel oil, once the cheap staple diet of the shipping industry, has been usurped by an abundance of low-cost, premium quality bunker fuel. That’s led to seafarers freezing orders for equipment to remove the sulfur from HSFO and maximizing compliant fuels. But don’t write off shipping ...

Agriculture markets eye normality as countries ease export restrictions

The global food supply chain, as well as demand for agricultural products, faces an unprecedented threat from the coronavirus pandemic. Livelihoods have been destroyed and economies dragged down, while prices of basic foodstuffs soared and countries imposed measures to limit exports and shore up do ...