News from the Alberta Society for Pension Reform
By Jim Doty

The Society would like to update ARTA members on its latest actions to improve pension benefits for Alberta teachers. We appreciate being able to communicate to you through this newsletter.

On November 28, 2004, Davis and Company from Calgary filed a Class Action Lawsuit between the Society and the Alberta Government and the employers of the teachers. The major legal issues of the lawsuit that will improve pension benefits for Alberta working and retired teachers are:

1. The Pension Shortfall: When a teacher retires prior to age 65 the teacher does not receive the promised 2% pension. The shortfall is equivalent to the 0.6% subtracted in the formula that is the CPP benefit payable at age 65.

2. Advance - Reduction Option: Many teachers chose this option upon retirement because of the inadequacy of their pension only to discover they may pay back far more than was borrowed.

3. Unfunded Liability: Since 1992 teachers have been forced to pay a huge surtax in contribution rates. The liability will not be paid until 2060 and it is the result largely of the government not contributing its share to the plan for over 40 years.

4. In 1994 there was a 5% wage rollback and a subsequent 5 year wage freeze. Teachers were told this was necessary to help pay down the provincial debt. Teachers who retired after 1994 will pay for this debt for the rest of their lives in reduced pension benefits. Incidentally, in 1994 the government had $891 million surplus.

ARTA © 2005

Our objectives are similar to those of the ARTA Standing Committee on Pensions. The ARTA Committee seeks improvement through the ATA, ATRF and political lobbying. The Society tried lobbying without any success and therefore was forced to take the legal approach. Improved pension benefits are the common goal and which ever method is successful in achieving this goal is the important reason why ARTA and the Society should collaborate on the objective. It is no secret that to be successful against the government, the Society needs large numbers of supporters and a large amount of money.

We know that Alberta teachers who retired during the 1970s and 80s do not stand to gain as much from our lawsuit as later retirees, however, your contribution rates were much lower and your losses much less. We ask you to think of the horrendous contribution rate current teachers are forced to pay and two more generations of teachers will pay. Also, keep in mind that in wealthy Alberta, our pension plan is the poorest plan as compared to the other provincial teacher plans. By law our pension plan cannot improve benefits until the liability is paid in 2060.

Annual membership of the Alberta Society for Pension Reform is $15.00. If you are interested in joining please send a cheque or money order to the Alberta Society for Pension Reform at 10532 - 60 St. Edmonton, AB T6A 2K9.
For more information phone: 780 - 406-9727 or visit our web site at:
www.AlbertaPensionReform.ca.

 

The views expressed in "Speak Out" do not necessarily reflect the views of the Alberta Retired Teachers' Association.