Teachers association to take legal action against Alberta government over pension dispute

The Alberta Teachers' Association (ATA) says it will be taking the government to court over a ministerial order signed last month that they say gives teachers less control over their pensions.

The ATA said on Tuesday its provincial executive council had voted unanimously to initiate legal action, and that association lawyers are in the process of drafting a court application which will be filed once complete.

On Dec. 23, 2020, Finance Minister Travis Toews signed a ministerial order allowing the government-owned Alberta Investment Management Corporation (AIMCo) to reject any changes proposed by the Alberta Teachers' Retirement Fund (ATRF). That order went into effect on Jan. 1. 

Teachers have repeatedly expressed concerns following the passing of Bill 22, which transfers their pension investments under AIMCo's management. The pension fund lost billions last year, and some union leaders had expressed concerns the manager was making decisions to prop up oil companies.

"We were never consulted on that, that move was never anything that was campaigned on … teachers are very happy with ATRF," ATA president Jason Schilling said in an interview with CBC.

"So to have this moved over without consultation and then subsequently to have a ministerial order put in place, that basically gives AIMCo veto power … infuriated teachers."

Toews has previously reassured teachers that the ATRF board would remain in control of pension decisions — a promise Schilling argues the recent ministerial order negates.

"Teachers were betrayed by their MLAs, the minister and the premier when this imposed [investment management agreement] failed to live up to their promises made to respect the ATRF's ability to direct the investment of teacher pension dollars," says Schilling. "We will fight the order in court, but there still needs to be political accountability for the broken promises."

Charlotte Taillon, press secretary for the minister, said while they're unable to comment on pending legal action, the ministerial order was necessary as a temporary measure as ATRF and AIMCo had not reached an agreement. 

She said the ATRF itself has said the ministerial order does not impact pension benefits, and that the government remains confident the parties will be able to reach an agreement — at which point the ministerial order will no longer be in effect. 

The ATRF board has made the case that under AIMCo management, the $18.9 billion pension fund would have been worth $17.5 billion — $1.3 billion less — by the end of 2019. The ATRF indicated mid-last year that its data showed it has outperformed AIMCo yearly from 2013 through 2019. 

AIMCo manages several provincial government funds, including the Heritage Savings Trust Fund, and the pension funds of more than 375,000 Alberta public sector workers.

A deal has yet to be reached between AIMCo and ATRF. About 83,000 current and retired teachers are affected by the management, which is expected to be complete this year.