By JEREMY APPEL on November 13, 2019.
The president of the local retired teachers association says many educators were blindsided by the government’s decision to unilaterally place their pensions under the control of a Crown corporation.
The late-October provincial budget moved the teachers’ pension from the private Alberta Teachers’ Retirement Fund, which has managed teachers’ pension since its 1939 inception, to the Crown’s Alberta Investment Management Corporation.
Mel Deydey of the Medicine Hat and District Retired Teachers Association says this was done without any consultation at all, which has fuelled educators’ worst fears.
“All of a sudden, the announcement was made in the budget and so there is a lot of skepticism,” he said. “What is the motivation of the government? Are there ulterior motives? Basically, teachers feel that their pensions are being threatened.”
According to Deydey, the ATRF has received a better return on its investments than AIMCo by two per cent overall.
“Being a smaller group, they were probably able to negotiate better in terms of the better categories,” he said.
As government employees, teachers unions must negotiate their contracts with the government, which Deydey says could put them in a bind if the employer has control over their pensions.
“Is it going to have an affect on negotiations with the teacher’s union? Is it a threat to break up the teacher’s unions?” he speculated.
“There’s a lot of unanswered questions right now and I think that’s the part that the teachers are feeling really skeptical and uneasy about.”
Deydey was one of about 50 teachers who showed up at Cypress-Medicine Hat MLA Drew Barnes’s town hall last week to express concerns.
Barnes said he would take their concerns to cabinet.
“I left the town hall meeting cautiously optimistic,” said Deydey. “I am hoping to carry forward that optimism once Mr. Barnes honours the promise and commitment he made at the meeting to bring and address our concerns with the government in Edmonton.”
In addition to the ARTF, Alberta Health Services and Workers’ Compensation Board were transferred to AIMCo’s aegis.
Barnes told the News the purpose of these transfers is to consolidate the pension funds under one umbrella, which he claims will provide better value for all parties involved.
“The rationale is more benefits for teachers, more benefits for retirees, and more benefits for the taxpayer,” he said.
According to Barnes, an enhanced AIMCo fund will save citizens 0.25 per cent in management fees.
“We think that will translate into an extra $41 million a year. What that will mean is teachers will receive more than $500 extra a year and taxpayers, who match these things, will save $500 a year per retired teacher,” he said.
“AIMCo has a great history of non-partisan, non-political investments and great returns. There’s a good track record.”
Chris Kohlman, a teacher at Margaret Wooding School in Redcliff calls this explanation “a load of garbage.”
“The ATRF has a fiduciary duty to do what’s right for teachers and for their plan holders. That’s not part of AIMCo’s mandate,” he said.
If it does provide teachers with more returns due to decreased administrative costs, “it would be very minor,” says Kohlman.
“That’s more than made up for by ATRF’s returns,” he said.
Like Deydey, Kohlman expressed deep concern that the move was done above teachers’ heads.
“There was no consultation. ‘We’re just going to take your pension away from you and not give you a say anymore,'” said Kohlman. “It’s just completely disrespectful.”
Deydey says it’s distressing that the government feels emboldened to make these unilateral moves.
“The government feels empowered to do whatever they want right now,” he said. “That’s the scary part.”