Alberta finance minister quietly issues order to take over management of public sector pensions

A recent order from Alberta’s finance minister has taken control of the pensions of hundreds of thousands of Albertans.
 

In the ongoing saga involving the Alberta public pension funds and the UCP government,  it was revealed in mid-January that Alberta’s finance minister Travis Toews issued a ministerial order on Dec. 23 instructing the Alberta Investment Management Corporation (AIMCo) to take over investment management for several public-sector pensions in the province, including the Alberta Teachers’ Retirement Fund (ARTF), the Local Authorities Pension Plan, the Public Service Pension Plan and the Special Forces Pension Plan.

This allows AIMCo to bypass pension investment policies set out by the trustees of these plans – and is not subject to appeal or arbitration.

Although Toews repeatedly promised that the public sector pension boards would continue to control their own investment decisions and strategies, the Alberta government took this latest action in response to a stalemate in negotiations between AIMCo and the plans as a result of Bill 22. 

Bill 22 transferred funds from several public sector pension plans, including the ATRF and Alberta Health Services (AHS), as well as the Workers’ Compensation Board fund, to AIMCo for management without any prior consultation. At the time, Toews had suggested that Bill 22 reflected the government’s desire for efficiency and “the best use of taxpayer dollars,” saying that there would be administrative savings that could reduce contributions.

The unions representing affected pension plan members were not convinced. They suggested that the United Conservative Party (UCP) wants to control the billions of dollars that Albertans have been saving for their own retirements.

Alberta Federation of Labour (ALF) president Gil McGowan suggested Bill 22 was tantamount to theft. He pointed out that the ATRF’s returns have been substantially better than AIMCo’s and that it has been independently managing its own retirement savings since 1939.

In response to this ministerial order, the ALF has said that they will launch at least one legal challenge. The Alberta Teachers’ Association was incensed and called the ministerial order “offensive and overreaching.” In early 2021, its provincial council voted unanimously to file its own lawsuit.

In the meantime, the pension plans involved have said that they will continue negotiations to ensure that their funds are managed in the best interest of their members.

We will continue to monitor this situation to ensure that no other governments follow Alberta’s lead. Well managed defined benefit plans are the best retirement security and any attack against these plans is cause for concern.

Social: After a ministerial order from Alberta’s finance minister Travis Toews, public sector pension boards in the province have been stripped of the power to make decisions about the management of their investments.