Auditor General's report illustrates need to halt changes to public service pensions

The government has clearly failed to make the case that its proposed changes are needed.

The February 2014 report of the Auditor General reinforces and supports the argument of public sector unions that changes to public employee pension plans are premature and have not been properly analyzed, the Union Coalition on Pensions said in a news release today.

The approach taken by the Redford Government has lacked consultation and testing of outcomes as recommended by the Office of the Auditor-General in its February 2014 report.

The government has clearly failed to make the case that its proposed changes are needed.

The Union Coalition on Pensions, made up of public sector unions with members and retirees in Alberta public sector pension plans, urged Finance Minister Doug Horner in a news release to consider the recommendations by the Auditor General and ensure that proper consultation and outcomes testing has taken place before major changes to the plans are introduced.

Unions have consistently recommended changes to governance of the plans that would improve stakeholder involvement in plan design changes to manage risks, as recommended by the Auditor General’s report, and that these changes have not been implemented by the government.

The Coalition notes specifically that the Auditor General concluded on page 31 of today’s report that it is “unclear whether the proposed reforms significantly increase the likelihood of the plans’ sustainability.”

Among the points made by the Auditor General’s report are the following:

-    The Government of Alberta has not properly engaged plan stakeholders – the employees and employers who pay for the plans
-    The government has not fully considered effects of the changes it is pushing through
-    The government has not planned how any changes would actually be implemented
-    The “hard cap” on pension contributions proposed by the government can in fact harm the plans’ sustainability

The Auditor General’s report provides clear evidence the government’s rushed process to major pension plan changes needs to be halted until appropriate consultation with stakeholders and rigourous analysis of the impacts of the government’s proposals has been completed, a process that cannot happen in a few weeks.

Approximately 300,000 Albertans, about a third of them retirees, and their family members are direct stakeholders in Alberta’s public sector pension plans. They are front-line workers in Alberta’s hospitals, schools, cities and towns.

Most members of the more than 27,000 members of United Nurses of Alberta are members of the Local Authorities Pension Plan.

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