Much conversation has been made over the past week on Premier Jason Kenney's proposal to withdraw from the Canada Pension Plan in favour of a provincially run alternative.
The move would certainly have a significant impact on pensioners. But Kenney has said such a change would be contingent on the results of a referendum and any movement on that front is still months away.
More immediate are changes pending to pensions and funds for the province's teachers, nurses and other public sector employees.
The Alberta budget, released Oct. 24, revealed these funds were expected to be transferred to the Crown corporation Alberta Investment Management Corporation (AIMCo) for management.
The move was a "hijacking," according to the Alberta Teachers' Association (ATA). The president of that organization, Jason Schilling, wrote on Twitter that making the move without consulting the ATA was "extremely disrespectful."
In the weeks that followed, representatives from relevant organizations have said they felt stonewalled as they have sought to consult on pending legislation. Some teachers say their elected officials haven't been receptive to their concerns.
"Is the democratic side of it going to happen? Are we going to be represented?" said Lee Martin, a teacher at Calgary's St. Teresa of Calcutta School.
"Or are they just going to legislate because it's a majority government and they're just going to go with it?"
Legislation directly related to transferred funds could soon be on the horizon but some experts said a larger provincial strategy surrounding public sector employee pensions may also be in the cards.
The players involved
To understand the changes proposed to various public sector funds and those that may be on the way, it's important to first examine the players involved.
All teachers' pensions in the province are currently managed by the Alberta Teachers' Retirement Fund Board (ATRF), an independent corporation established in 1939. The ATRF manages approximately $18 billion of assets on behalf of more than 80,000 members.
Under proposed changes, that $18 billion would be managed by AIMCo. Given ATRF's rates of return — reaching 9.5 per cent over a six-year period as of last year, according to public documents — the uproar is understandable, said Jim Fischer, a finance professor at Mount Royal University.
"If you were happy with how your finances were being managed by whoever you were consulting with, and all of a sudden you were told, 'Look, somebody else is going to do this from now on,'" Fischer said. "That's a big deal."
Representatives from ATRF requested and were granted an initial meeting with Alberta Finance Minister Travis Toews after news of pending changes broke.
"It was not as productive as we hoped it would be," said Rod Matheson, CEO of ATRF.
Matheson said requests were made to receive the government's business case for moving ATRF funds to AIMCo, but were told the information would remain under budget confidentiality until legislation was tabled.
"We are — like everybody, I guess — just anxious to see the legislation," he said.
Other public service pensions, such as those managed under the Local Authorities Pension Plan (LAPP), are also due to be impacted.
LAPP, the largest pension plan in the province — which includes pensions for municipalities, health organizations and more — includes approximately 260,000 members and more than $45 billion in funds. LAPP funds are currently managed by AIMCo.
As of today, I don't think there's really been a consultation process. - Christopher Brown, CEO of LAPP
Pending changes included as part of the Alberta budget are set to roll back LAPP's ability to choose their fund manager moving forward, though LAPP only gained that ability in March this year.
"They were given independence from the government. One of the prime things that meant for LAPP was that they could determine who managed their money," Fischer said. "If they weren't happy with their current investment manager at a given point in time, they could go and find another one with another manager … that was a huge win for them.
"They didn't move it from AIMCo, but the key now is that they'll lose that ability in the future."
Christopher Brown, CEO of LAPP, said the first word they heard of potential changes was on budget day.
"As of today, I don't think there's really been a consultation process," Brown said. "Certainly, at least, not with us."
But though funds for teachers, nurses, public service employees and others are being centralized, Fischer said he would be surprised if other changes weren't on the horizon.
Defined benefit and defined contribution
Though the workers represented in ATRF and LAPP are numerous, the two pension plans share a similarity — both are defined benefit pension plans.
The public sector typically utilizes defined benefit pension plans, which guarantee employees will be paid a predetermined monthly amount for life after they retire.
The alternative, known as a defined contribution pension plan, sees employees contribute a percentage of their income annually. Those contributions are sometimes matched by employers, and returns earned on contributions are paid out to employees at retirement.
There is, however, no guaranteed predetermined monthly amount.
"The trend has been, over the last few decades … moving toward defined contribution and away from defined benefit," Fischer said. "In the private sector, that's certainly been the case for a long time now."
And though no mention was made in the budget of shifting public employee pensions from defined benefit to defined contribution, Kenney himself has come out in favour of the move.
Prior to becoming premier and leader of the United Conservative Party, Kenney answered questions as part of a leadership survey conducted by the Canadian Taxpayers Federation, a advocacy group he previously led.
"Reforming public sector pensions for future beneficiaries will also be required to manage huge unfunded liabilities," he wrote in 2017. "I led the fight to eliminate Alberta MLA pensions in 1993. If MLAs have no pensions, it is not unreasonable to suggest that future public-sector pension plans should avoid unfunded, taxpayer-guaranteed liabilities."
If MLAs have no pensions, it is not unreasonable to suggest that future public-sector pension plans should avoid unfunded, taxpayer-guaranteed liabilities. - Jason Kenney, writing in a Canadian Taxpayers Federation survey in 2017
Fischer said he would be surprised if this particular government didn't soon begin talking about moving in that direction.
"From a teachers' perspective, if the ATRF has been doing a suitable job for them, why fix the machine when it's not broken? I think the government is talking about reducing the number of people who are managing these calls … [but] I think that's small potatoes," he said.
Fischer said private companies have moved toward defined contribution plans in part to protect against risk.
"It's a cost savings to government, and particularly unforeseen government liability in these kinds of things," he said.
Jerrica Goodwin, spokesperson for Alberta's Treasury Board and Finance, wrote that more information about changes to pensions was not available.
"[The questions] raised are about legislation that has not been tabled," Goodwin wrote. "Further information will be available at that time."
'A much larger divide'
Duane Bratt, a political science professor at Mount Royal University, said the debate around defined benefit and defined contribution pensions is nothing new.
"I get that all the time, anytime I make a comment publicly, it's like, 'Well, you don't work and you've got a gold-plated pension' and all this sort of stuff," Bratt said. "So [Kenney] is responding to his grassroots, which has viewed public employees as the enemy."
A dip in wages has contributed to moves surrounding pensions, according to Bratt.
"Five years ago, private sector workers made a lot more than public sector workers," he said. "Then, private sector people started to lose their jobs and they demanded that public sector people lose their jobs too, apparently believing that having one person laid off has to be balanced by laying off someone else.
"So it continues to feed into this narrative that public sector workers are overpaid and underworked."
Martin, who teaches Grade 6 at St. Teresa, said not feeling heard by his representatives has been difficult.
"We teach democracy, and I'm telling the kids that in democracy, your voice is heard and you have a representative in Canada. It's not like ancient Greece," he said. "It's a bit tough. It's a hard pill to swallow, for sure."