June 20, 2013

Teachers’ Pensions – Historical Highlights

1915 Alberta Education Association (AEA) appoints committee to study teachers’ pensions.
1917 AEA approves report, authorizes submission of same to minister of education.
1918 Minister of education rejects proposal as a “combined insurance and annuity scheme.”
1919 Alberta Teachers’ Alliance (ATA) presents a “straight” pension plan to the minister of education. New minister-no action taken.
1920 Provincial election, new minister-no action taken.
1922 Superannuation scheme for Alberta civil servants. Discussion re-inclusion of teachers-no action taken.
1925 ATA presents new pension proposal to executive council of government. Premier promises definite action. Cabinet Committee meets ATA Committee-surveys conducted to determine financial viability.
1928 The Alberta Teachers’ Retirement Act presented to legislature in bill form. Provided coverage for teachers employed under the School Act of Alberta; matching contributions of 2.5 per cent each; Pension Board to invest in government bonds; benefit based on final 10 years of salary approximating two-thirds of average salary with maximum 40 years service; unreduced pension at 60 with 35-years service.
1935 Premier promises a pension plan for teachers.
1939 The Alberta Teachers’ Retirement Plan Act is passed-labelled “interim.” Enabling legislation-details set out in bylaws. Provincial treasurer appointed chair of Board of Administrators. Contributions commence September 1, 1939. Three per cent contributions with .5 per cent of teachers’ contributions earmarked for reserve used to pay pensions to teachers with inadequate contributions; pensions set at $25 per month, one-half paid by government.
1940 ATA Annual General Assembly (AGM) asks pension board to bring forward an alternate, “actuarially sound” pension plan.
1941 Urban school boards contribution rate .5 per cent.
1943 Suggestions for a permanent plan with both service and annuity components presented
1944 Pension increase to $30 per month effective January 1, 1944 on recommendation of actuary. ATA provides government with recommendations, requests discussions on new principles and actuarial study of present plan. No action taken.
1945 ATA reiterates proposal. No action taken. School divisions now required to contribute.
1946 Pensions increase to $35 per month effective January 1, 1946 on recommendation of actuary. ATA reiterates proposal, government advises delaying until following the introduction of the new civil service plan which teachers may wish to join. Actuary engaged to review plans. ATA AGM proposes increase in contributions to 5.0 per cent with commensurate increase to benefits.
1947 Pensions increase to $40 per month effective January 1, 1947 on recommendation of actuary. Unfunded liability (UFL) estimated at $7 million-actuarial report received 1951. Public Service Pension Act passes-provides for pension of 2.0 per cent of final five for service over age 30, employee contributions of 5.0 per cent and indusion of other groups in the plan. Minister promises thorough study and something for teachers in the next session of the legislature. ATA applies for inclusion in the civil service plan.
1948 ATA prepares and presents to government “The Case for Pensions for Teachers.” Government announces plan for teachers-pension of 1.5 per cent of five-year average for service between 30 and 65. Contributions-teachers 4.0 per cent, school boards 0.5 per cent, government 3.5 per cent.
1949 UFL $12 million. Contribution rate required 11 per cent current service 8. 0 per cent interest on UFL 3.0 per cent-actuarial report received 1951.
1951 ATA proposes teachers’ contributions increase 1,0 per cent, government/employers 1.0 per cent plus improved earnings on investments. Government amends Teachers Retirement Fund Act to permit teachers’ contributions of not less than 4.0 per cent nor more than 7.0 per cent.
1952 ATA AGM approves contribution rate increase to 5.0 per cent, requests government increase government/employer rates by 1.0 per cent and make other changes to provide the final1.0 per cent. No action taken.
1953 ATA AGM requests actuarial study. UFL as at August 31, 1953:$16.5 million-1954 actuarial report.
1954 ATA, Board of Administrators and Executive Council agree on potential solution-government to pay one-half of pension bill and assume responsibility for deficit.
1955 ATA proposes government pay one-half of pension and assume responsibility for deficit, teachers to contribute 5.0 per cent and employers 05 per cent, pensionable service for service between 30 and 68, removal of 35-year limitation on contributions, benefit at 1. 75 per cent and broadened investment powers.
1956 Government-proposed bill rejected by ATA. Agreement reached-government to guarantee benefits, pay pre-April1, 1948 pensions and pay 50 per cent of post-1948 pensions, 35-year contribution limit removed, pensionable service age 30 to age 68, pensions 1.67 per cent, investment powers broadened. Bill passed-ATA and government disagree on nature of government guarantee. Prior government contributions placed in reserve to pay its’ share of pensions-reserve depleted in 1965/66. School board contributions discontinued.
1959 Pensions increased to 2.0 per cent.
1960 Restoration of 35-year limit on contributions restored.
1963 Public Service Pension Act amended to remove age 30 barrier to provide unreduced pension with age plus service condition. AT A requests similar treatment-rejected.
1964 Government of Canada announces Canada Pension Plan (CPP). ATA proposes decking- Government of Alberta declines.
1965 Teachers’ Retirement Fund Act amended-provides for integration with CPP.
1966 Bylaw amended-teachers’ contributions 3.5 per cent under YMPE, 5.0 per cent over, TRF pension reduced accordingly.
1968 UFL $251.2 million.
1970 Age 30 barrier removed, unreduced pension with age plus service of 100, service limited to age 65. Public service pensioners provided with cost of living adjustments.
1971 Commenced reduction of age plus service to 95. Act amended to permit cost of living adjustments to pension-ad hoc increases by OIC commenced.
1973 Commenced reduction of age plus service to 90. UFL $374.3 million.
1977 Age plus service index reduced to 85.
1978 UFL $741.6 million.
1979 1978 actuarial report received-TRF Board advises government and ATA UFL is a significant concern.
1981 Government commences employer contributions to Public Service and Public Service Management Plans (employer contributions to other public sector plans commenced earlier). Government transfers $1.1 billion to public sector pensions plans.
1983 UFL $1,33 billion.
1984 Report of the minister’s informal task force on teachers’ pensions recommends: removal of superintendents of schools, teacher contributions of 6.0 per cent below YMPE and 7.5 per cent over YMPE, best 3-year average salary, 60 per cent of cost of living adjustment (COLA), a number of other benefits changes, full funding of current service–government rate 8.94 per cent. Task force proposes government consider paying interest on UFL, continuing to pay 50 per cent of accrued pensions, retire UFL in 15 years.
1985 ATA accepts task force report except superintendents to remain members, 70 per cent COLA and CPP bridging to be included. Government response-no implementation for
at least a year or two.
1986 UFL $2.4 billion. $3.5 million of fund earnings required for payment of pensions. Public Accounts reports UFL at $2.6 billion. Disagreement over whether costs of ad hoc COLA shoud be included in UFL. ATA reiterates pension position. TRF Board meets minister Minster agrees rewrite needed, provides pension legislation schedule, states more consultation required with parties and with provincial treasurer.
1987 ATA submission to cabinet re pension improvements. Minster states TRF legislation changes to be consistent with other public sector plans, proposes preliminary meeting. ATA agrees. Minister requests teacher rate increase and review of task force report. ATA agrees to rate increase conditional upon bylaw amendment and a structure and timetable for reform, objects to lack of progress on reform and UFL. Teacher contribution rates increase to 3.85 per cent and 5.5 per cent. TRF presents proposed changes to minister and ATA. Department of Education advises that TRF changes are to await major changes in other public sector plans.
1988 Provincial treasurer and board chair meet re pension reform. ATA submits pension resolutions. Department and AT A officials meet to discuss pensions. Minister advises all changes to await general review.
1989 UFL $2.4 billion. $10.8 million of earnings required to pay current pensions. ATA submission to government re pensions improvements. Scheduled meetings of TRF, minister and provincial treasurer cancelled by provincial treasurer. TRF meets minister-officials meet re “moderate reforms.”
1990 $13.9 million of earnings required to pay current pensions. ATA and department officials meet re “moderate reforms.” Legislation fails to make it to agenda of the Legislative Assembly, spring sitting. ATA commences political campaign to bring the government to the table to discuss pensions.
1991 Minister and ATA commence negotiations on pension plan improvements and financial stability of fund. Memorandum of understanding (MotU) reach~ubsequently rejected by ATA Emergent ARA in part due to incomplete resolution of UFL. ATA commences round two of pension campaign-recommends teacher’s rate increase to 4.55 per cent and 6.5 per cent.
1992 UFL $4.5 billion. Government approves rate increase. Negotiations resume. MotU reached-accepted by ATA Emergent ARA; takes effect September 1, 1992: COLA 60 per cent, 70 per cent on post-1992 service ( additional1 0 per cent is funded by teachers), shortened vesting, numerous other benefits changes, full funding of current service required by legislation. Pre-1992 service funded by additional levy, transfer of surpluses and over-contributions from current service. Retirement of UFL by 2060-reliant on growth in teacher numbers. Contribution rate required: 18.5 per cent of payroll; teachers-current service 7.05 per cent, UFL 1.6 per cent total 8.65 per cent; government-current service 6.55 per cent, UFL 3.3 per cent total9.85 per cent. Planned phase of increased rates:
1992 09 01-13.45 per cent
1993 09 01-15.1 per cent
1994 09 01-167 per cent
1994 09 01-18.5 per cent
1993 UFL $3.7 billion. Alberta Teachers’ Retirement Fund (ATRF) commences strategic investment review.
1994 UFL $3.9 billion. ATRF commences implementation of strategic investment review: 50/50 equity/fixed income policy asset mix with 10 per cent bias to equities. Government budget cuts result in 4.74 per cent cut in salaries, 3.4 per cent reduction in number of teachers and aging of membership by .5 years.
1995 UFL $4.3 billion. Contribution rate required-19.5 per cent of payroll; teachers total 9.12 per cent, government tota110.38 per cent. Effective date of Teachers’ Pension Plans Act and regulation, based on Motu. ATRF completes implementation of strategic investment review; revises investment structure.
1996 UFL $4.5 billion. Contribution rate required-21.0 per cent of payroll; teachers total 9.77 per cent, government total11.23 per cent. Rate increases due to 1994 budget cuts-salaries – 3 per cent of payroll; reduced teachers -4 per cent of payroll and aging of teaching force – .6 per cent of payroll.
1997 UFL $3.9 billion.
1998 UFL $4 billion.
1999 UFL $4.3 billion. Reduction in teacher growth rate from assumed 1.5 per cent to .75 per cent. Contribution rate required-22.55 per cent of payroll; teachers total 9.87 per cent, government total 12.68 per cent.
2000 UFL $4.4 billion. ATRF identifies current service fund destabilization as inevitable result of transfer of transient surpluses to UFL. ATRF adopts 70/30 equities/fixed income asset split, increases foreign content.
2001 UFL $4.7 billion. Contribution rate required-22.51 per cent of payroll; teachers total 9.91 per cent, government total 12.6 per cent.
2007 In November the ATA and the Government of Alberta reach a new Motu in that, the Alberta Government agrees to pay the entire pre-1992 unfunded liability if all 62 bargaining units reach 5-year collective agreement deals by midnight January 31, 2008.
2008 On January 31 an agreement is reached shortly after 6pm with the last school district. All 62 bargaining units now have 5-year deals guaranteeing at least 5 years labour peace and repayment of the pre-1992 unfunded liability by the Alberta Government. The agreement included a 3% increase in the first year with increases in the last four years attached to the Alberta Average Weekly Earnings index. This agreement has resulted in the following salary increases for all Alberta teachers.
2007/09/01 – 3.00%
2008/09/01 – 4.53%
2009/09/01 – 5.99%
2010/09/01 – 2.92%
2011/09/01 – 4.54%
2013 In March of 2013 an agreement was reached with the stakeholders in Alberta which will see salary increases as follows:
2012-2013- 0%
2013-2014- 0%
2014-2015- 0%
2015-2016- 2%
These numbers will have an effect on the 5-year average for teachers retiring going forward.

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