Far from being “unsustainable,” Alberta’s largest pension plan is very healthy – and getting healthier
Edmonton – Albertans can add one more item to the long list of things that Alison Redford was wrong about.
Earlier this week, Alberta’s largest pension plan – the Local Authorities Pension Plan (LAPP), which provides pension coverage to nearly 237,612 working and retired Albertans – released figures showing that it is now close to being fully funded.
According to the LAPP’s latest 2014 Audited Financial Statements, the plan now has 93 per cent of the funds necessary to cover its long-term obligations – up dramatically from 85 per cent two years ago.
Alison Redford tried to score cheap political points by going after the retirement savings of thousands and thousands of Albertans,” said Alberta Federation of Labour president Gil McGowan, who led the coalition that rallied to defend Alberta’s public sector pension plans.
At the time, Redford and her Finance Minister, Doug Horner, said the plans were unsustainable. We countered by pointing out that they were just recovering from the global recession of 2008 and that plans were in place to restore the pensions to good health. In short, they screamed ‘panic’ while we counselled patience. What this report shows is that we were right and they were wrong.”
Former premier Jim Prentice eventually backed away from Redford’s attack on public sector pensions in the face of unprecedented public protest and after being presented with evidence from a coalition of unions that the plans were, in fact, well on the way to recovery without cuts to benefits.
The next time right-wing fear mongers try to panic Albertans into making unjustified concessions and swallowing unnecessary cuts, I hope we all remember how wrong they were when they claimed our pensions were insolvent,” said McGowan.
News of the LAPP’s dramatically improved financial health comes days after Treasury Board and Finance’s 2014-15 annual report showed that the overall liability between Alberta’s four major public-sector pension funds had dropped by more than $1-billion over the past year.
“All of this provides an important lesson to policy makers,” concluded McGowan. “And that lesson is that pension plans have to be managed over the long term. The personal savings and retirement security of thousands and thousands of people are at stake, so we can’t afford to panic and over-react every time there’s a hiccup in the stock market or when the economy goes through a rough patch. We owe it to retirees and people saving for retirement to avoid panic and not allow ourselves to fall victim to fear mongering.”
Olav Rokne, Communications Director, Alberta Federation of Labour at 780.218.4351 (cell) or via e-mail firstname.lastname@example.org