AFL president Gil McGowan says the supplementary plan proposed by the two provinces is flawed because it's not mandatory and — even when added to Canadian Pension Plan and Old Age Security benefits — still wouldn't provide workers sufficient money for retirement.
"It's clear we need some fundamental reforms, but based on the analysis that we've commissioned, it's clear to us the Alberta-B.C. model simply won't do the job," McGowan said Thursday from Dawson City, Yukon where the western premiers are meeting this week.
"If our provincial leaders are serious about introducing new policy that extends pension coverage to a greater percentage of the Alberta population, they can't introduce a system that's not mandatory."
Employers that don't have pension plans now aren't likely to sign up if they still don't have to, he said.
The AFL says only 40 per cent of Canadians have workplace pension plans, but the percentage is much lower in Alberta. It says only 18 per cent of Albertans working in the private sector have pension plans.
The situation has prompted the Alberta government to work with B.C. on a supplementary pension plan for workers with no company pensions and last November the two provinces released a report of a joint expert panel that recommends how a joint plan should operate.
"More and more people ... are starting to realize that if major policy changes aren't initiated, significant numbers of Canadians — probably millions of them — will face the very real prospect of poverty in their old age," said McGowan.
But the AFL insists the Alberta-B.C. plans is "at best an awkward Band-Aid solution."
McGowan says an actuarial consulting firm hired by the AFL found that a person earning $50,000 who retired at age 65 would likely receive only about half the pension income considered necessary for a comfortable retirement. He said the plan could generate as little as 14 per cent of what a person earned before retiring — far below the recommended threshold of 70 per cent.
That's because the plan also doesn't require employers to match employee contributions, he noted.
McGowan said the proposed plan also gets low marks because it is a defined contribution plan rather than a defined benefit plan, meaning that if the stock market collapsed after the worker retired, the benefits would be reduced.
"From our perspective, the current recession has not only diminished the nest eggs most people set aside for retirement, but it shone a light on the patchwork system that we've created in the country," he said.
McGowan said the biggest problem with the supplemental plan is it diverts attention away from the real issue — the fact the Canadian Pension Plan is inadequate and requires major reform to ensure working Canadians can retire with dignity.
The AFL released the report at the western premier's conference to discourage other provinces from signing on to the plan rather than pressing for changes to the national pension plan, McGowan said.
"Our provincial and federal leaders have to start thinking very seriously about making big changes on the pension front as opposed to half measures like the proposed Alberta-B.C. plan," he said.
Alberta Finance officials say the province is not committed to any one plan and it is keeping its options open.
"This is just one of the proposals that they are taking into consideration," said Alberta Finance spokeswoman Jennifer Guzzwell. "We're not exactly sure what the plan will look like and whether it will be mandatory or not."
She said finance ministers from B.C., Alberta, Ontario, Nova Scotia and Manitoba have scheduled a meeting in July to discuss the possibility of a national supplementary pension plan.
Alberta Finance spokesman Bart Johnson added the province has no plans to proceed immediately with the Alberta-B.C. proposal.
"We would prefer to meet with other provinces and see what we can come up with," he said.
McGowan applauded the Alberta and B.C. premiers for considering "long overdue pension reform" and said a national summit on the issue is a great place to begin.
"We're confident that if that kind of meeting is held and all the information is put on the table, Canadians will agree with us that expanding the CPP is the best way forward."
Edmonton Journal, Thurs Jun 18 2009
Byline: Darcy Henton
Policy paper adopted at AFL 46th Constitutional Convention, April 23-26, 2009
c/o 10802 - 172 Street, Edmonton, AB T5S 2T3
Ph: 780-483-3021 Fax: 780-484-5928
A coalition of Alberta unions says recent changes in the rules governing activities of the board of the Alberta Local Authorities Pension Plan (LAPP) put at risk pension rights of 125,000 Albertans - including rights to early retirement, cost of living allowances and workers' ability to retire when their age and years of service add up to 85.
The Labour Coalition on Pensions has purchased full-page advertisements in Alberta daily newspapers today calling on members and pensioners to telephone their MLAs and Premier Ed Stelmach to overturn the changes. The coalition has registered a website - www.savemypension.ca - where detailed information on the situation is available.
The Coalition also commenced legal action to overturn the changes in governance rules for the LAPP Board on December 19, 2007.
"While our legal action continues, we believe this is fundamentally a political problem that can be solved quickly by the Premier and cabinet," the Coalition said today in a statement.
At issue is a new employer-dominated system of governance brought in despite union opposition at a November 15, 2007 meeting of the LAPP Board.
The coalition says the new rules break a long-standing agreement which required union approval for all significant changes to the policies or governance of the Plan - opening the door for decisions which are against the interests of working people.
The old rules, established when employers and unions bailed out the plan's unfunded liability in the early 1990's, required a two-thirds majority and a quorum of eight members of the board, which had to include four employer representatives and four employee representatives. Now only a simple majority is required and there need not be a single labour representatives present.
The new rules were passed surreptitiously using the requirements of the new rules rather than those of the existing rules.
"We urge all public service pension plan members and retirees to contact the government and demand that this decision be reversed," the Coalition members said. "Existing early retirement provisions, COLA provisions and the '85 factor' are all at risk because of this change," the unions said.
The coalition is made up of the Alberta Federation of Labour, the Alberta Colleges and Institutes Faculty Association, the Alberta Union of Provincial Employees, the Amalgamated Transit Union, the Canadian Union of Public Employees, Health Sciences Association of Alberta and United Nurses of Alberta. It represents approximately 125,000 members of the $15-billion LAPP.
For more information, contact:
Elisabeth Ballermann, President, Health Sciences Association of Alberta, 780-488-0168
Doug Knight, President, AUPE, 780-930-3301 or 780-265-6655 (cellular phone)
D'Arcy Lanovaz, President, CUPE Alberta Division, 403-861-5235
Gil McGowan, President, Alberta Federation of Labour, 780-483-3021
Heather Smith, President, United Nurses of Alberta, 780-425-0125
Union Coalition Takes Legal Action to Overturn Changes to Governance of Alberta Local Authorities Pension Plan
EDMONTON - A coalition of important Alberta unions and the Alberta Federation of Labour (AFL) will commence legal action today to overturn recent changes in the rules governing activities of the board of the Alberta Local Authorities Pension Plan.
An originating notice of motion will be filed in the Alberta Court of Queen's Bench by the AFL and the Alberta Union of Provincial Employees, Canadian Union of Public Employees, Health Sciences Association of Alberta and United Nurses of Alberta.
The unions are members of the Labour Coalition on Pensions, representing approximately 125,000 members of the LAPP, which at $15-billion is Alberta's largest pension plan. The Amalgamated Transit Union and the Alberta Colleges and Institutes Faculties Association are also members of the coalition. AUPE is a part of the coalition but not a member of the AFL.
The coalition objects to a change introduced suddenly at the LAPP Board's Nov. 15, 2007, regular meeting that, if allowed to proceed, would break a long-standing agreement and deprive unions of a veto over decisions negatively affecting their members and retirees.
"This is an extremely serious matter of grave concern to our members," the coalition said in a joint statement.
Under rules properly adopted in 1994, the 14-member LAPP Board required a two-thirds majority to pass a motion. In addition, under those rules, a quorum was defined as eight members of the board, including four employer representatives and four employee representatives.
The 1994 rules were based on an understanding among the Government of Alberta, employers and unions that stemmed from pension reforms in 1991 and 1992.
Through the understanding, employees agreed to help pay for the LAPP's unfunded liability in return for an independent pension plan and joint governance, neither of which have been truly implemented. However, the rules governing the conduct of the board gave unions representing LAPP members a way to stop measures that would hurt their members or retirees.
Other properly constituted boards of Alberta agencies operate under rules similar to the old rules of the LAPP Board.
On November 15th, however, the LAPP Board adopted two changes based on an argument presented by their legal advisor. Under these changes, quorum would now be defined as 50 per cent of the members of the board and motions would be passed by a vote of 50 per cent plus one.
The unions dispute the arguments of the LAPP's legal advisor and object to the new rules.
The changes were passed by the board using the new rules as interpreted by the LAPP's lawyer.
The union action being filed today argues that the changes constitute a breach of the understanding stemming from the 1991-92 pension reforms and improperly take away the unions' agreed-upon ability to protect their members' interests.
In addition, the action argues that the board lawyer's opinion is in error and that the action of the board, based on that opinion, is improper and must be overturned.
- 30 -
For more information contact:
Gil McGowan, AFL President @ 780.483-3021 (office) or 780.218-9888 (cell)
Carl Soderstrom, Director of Labour Relations, AUPE @ 780.930-3340 (office) or 780.719-7404 (cell)
Policy paper adopted at AFL 44th Constitutional Convention, May 12 - 15, 2005
EDMONTON - If Prime Minister Paul Martin doesn't want to see a "patchwork quilt" of maternity benefits in Canada - generous in places like Quebec and sub-standard in places like Alberta - then he needs to wake up and appeal a controversial court decision before it's too late, says the Alberta Federation of Labour.
In a letter sent to the Prime Minister today, AFL president Les Steel urged the federal government to appeal a January 27 decision by the Quebec Court of Appeal that said maternity benefits are a social program and therefore fall under provincial jurisdiction. The federal government has only until February 26 to file its appeal.
"If your government doesn't appeal the Quebec decision it will open a dangerous door," wrote Steel in his letter to Martin. "Once provinces like Alberta begin asserting their new 'rights' over EI, we fear that maternity and paternity benefits as we now know them will be history."
Steel told Martin he has absolutely no confidence that the Alberta government would maintain the current level of benefits for new parents if jurisdiction for maternity programs was handed over to the provinces.
"In Quebec, given its progressive history on social policy, it may well be true that workers will get better benefits under a provincially administered plan," wrote Steel. "But the same cannot be said for other provinces. Do you really think that the Alberta government would have instituted maternity benefits even half as generous as those available under the existing EI plan if the program had fallen under provincial jurisdiction? Do you honestly think they would defend existing benefits with the same zeal as the federal government? From where we sit, the answer to both of these questions is clearly no."
If Martin doesn't want to go down in history as the Prime Minister who 'looked the other way' while Canada's system of maternity benefits was dismantled, Steel says he should act quickly to appeal the Quebec court decision.
"The clock (is) ticking," wrote Steel. "Please act now. Please appeal the decision & This is (the federal government's) chance to do the right thing. It's your chance to stand up for a program that means so much to so many Canadian workers and their families. Please don't squander this opportunity."
For more information call:
Les Steel, AFL President @ 780-483-3021(wk) 780-499-4195 (cell)
Gil McGowan, AFL Communication @ 780-483-3021 (wk) 780-910-1137 (cell)
Attachment - Text of Letter
February 25, 2004
Sent by Fax: (613) 992-4291
The Right Honourable Paul Martin
Government of Canada
House of Commons
Room 313-S, Centre Block
Dear Prime Minister:
As I write this letter, there are only two days remaining before your government can no longer appeal the controversial decision on Employment Insurance and parental benefits that was handed down last month by the Quebec Court of Appeal. With the clock ticking, I am writing on behalf of thousands of unionized workers in Alberta with an urgent plea. Please act now! Please appeal the decision!
If the federal government misses this opportunity to defend the Employment Insurance program, we are convinced that the consequences for working people across the country will be dire. In particular, we are worried that the benefits currently available for new parents - so recently introduced - will be eroded or, in places like Alberta, eliminated entirely. And by standing idly on the sidelines, your government will be largely to blame.
Of course, we've heard the arguments and reassurances put forward by the government of Quebec. They say that maternity and parental benefits are essentially a social program or, at the very least, akin to a commercial insurance plan - both of which would fall under provincial jurisdiction. The Quebec government has also promised that if it took over the plan, the benefits would be more generous than the under the existing program.
But, here in Alberta we have two major objections. First, we don't buy the argument that any portion of EI should be seen as a social program - and we think it is obvious that EI is not anything like a commercial insurance plan. From our perspective, the purpose of EI is clear: the program is designed to temporarily replace the income of workers faced with interruptions in their employment. That includes any interruption in employment, whether it is the result of lay-off, illness or pregnancy.
Page 2 -- The Right Honourable Paul Martin
That's not to say that the existing maternity program is without flaws. For example, we feel strongly that the plan needs to be expanded to cover contract workers and the self-employed. We also think the number of weeks of work required for eligibility needs to be dropped. But, those are questions of fine tuning. What the Quebec government wants would be like throwing the baby out with the bath water. In our opinion, this whole case is nothing more than a thinly veiled power-grab by the Quebec government - and the federal government should not allow it.
The second - and probably more important reason - why we in the Alberta labour movement want you to appeal the court decision has to do with the impact we fear it will have on the access Alberta workers have to maternity and parental benefits. In Quebec, given its progressive history on social policy, it may well be true that workers will get better benefits under a provincially administered plan. But the same cannot be said for other provinces. Do you really think that the Alberta government would have instituted maternity benefits even half as generous as those available under the existing EI plan if the program had fallen under provincial jurisdiction? Do you honestly think they would defend existing benefits with the same zeal as the federal government? From where we sit, the answer to both of these questions is clearly "no."
That's the root of our concern: if your government doesn't appeal the Quebec decision it will open a dangerous door. Once provinces like Alberta begin asserting their new "rights" over EI, we fear that maternity and paternity benefits as we now know them will be history. The question for you and members of your government is this: do you want to see a patchwork quilt of policies in Canada, where some Canadian workers have access to generous parental benefits, and many other do not? And do you want to go down in history as the government that looked the other way as this kind of patchwork was created?
This is your chance to do the right thing. It's your chance to stand up for a program that means so much to so many Canadian workers and their families. Please don't squander this opportunity.
ALBERTA FEDERATION OF LABOUR
But the question needs to be asked whether public health care, public education and income security are also competitive advantages, for both employers and workers.
EDMONTON - "The changes to the maternity and parental leave provisions in the Employment Standards Act clearly places importance back on Alberta's families. These changes benefit all working parents," says Audrey Cormack, President of the Alberta Federation of Labour.
"Working mothers and fathers are no longer being penalized for choosing parenthood in this province. By mirroring the changes to those made to federal EI creates a level of jurisdictional equity that we rarely see in Alberta."
Cormack's comments follow the government's announcement to extend job-protected employment leave to parents for up to 52 weeks. The changes to the Employment Standards Act also include new provisions for job-protected parental leave for fathers and adoptive parents. Alberta's leave provisions are now in line with other provinces.
"I want to commend Mr. Dunford for demonstrating the political will to adopt all of the committee's recommendations. I am pleased to finally see a public consultation process that worked quickly and effectively," says Cormack.
"We are happy with today's announcement, but we as a Federation will still be lobbying the federal government to ensure that the benefits working parents receive will actually allow them to take advantage of the longer leave periods. For women and low-income families, living on 55% of your salary for an entire year is out of the question."
For further information call:
Audrey Cormack, President @ 499-6530(cell)/ 483-3021(wk)/ 428-9367(hm)