Alberta''s public service pension plans are healthy - just like AUPE predicted
Tens of thousands of AUPE members can look forward to more money in their pockets this year after two major public sector pension plans announced they are dropping contribution rates.
Both the Public Service Pension Plan (PSPP) and the Local Authorities Pension Plan (LAPP) have reported their financial health continues to improve.
As a result, members of both plans will enjoy a rate reduction that took effect Jan. 1, 2018. PSPP rates dropped between 1.23 per cent and 1.77 per cent, depending on the member''s annual salary, while the contribution rates for the LAPP dropped by one per cent.
In the case of the PSPP, the plan is now fully funded for the first time in a decade. It attained a surplus of more than $300 million in 2016, meaning its assets have grown to a size that will ensure it can provide the pensions promised to its members upon retirement.
Similarly, the LAPP''s financial health continued to improve in 2016, increasing to 98 per cent funded.
"We feel some vindication at this news. When our pensions came under attack just a few years ago, it was our members who stood up to the government of the day and said, ''Hands off!''" said AUPE Executive Secretary-Treasurer Jason Heistad.
Public service pensions are often caught in the crosshairs of cynical politicians who use them to drive an artificial wedge between members of the voting public.
That was the case in Alberta nearly four years ago when the former Progressive Conservative government introduced a pair of pension bills that would have increased the early retirement age and eliminated cost-of-living increases.
The ensuing fight was one for the history books. Union members across the province angrily took on the government, which claimed the funds wouldn''t otherwise be able to keep up their commitment to retired workers.
AUPE knew at the time those excuses didn''t hold water and members rallied in opposition. The province finally relented, hitting the brakes on the bills and instead sending them to be studied by a legislative committee. Over the course of that summer, the committee heard from thousands of hard-working AUPE members about the importance of their pensions.
By that fall, the provincial government had scrapped the legislation altogether. And as AUPE predicted then, the funds have continued to grow sustainably.