Tabling on Tuesday of Bill 27, Alberta legislation that will wrest control of public service pensions from the sole hands of the minister of finance and hand it to joint boards run by public service employees and employers, should be the denouement of a long and sometimes dramatic story.
“This takes the politics out of pensions,” Finance Minister Joe Ceci stated boldly at a news conference moments after the Joint Governance of Public Sector Pension Plans Act was introduced in the Legislature.
That almost certainly overstates reality – public sector pensions, alas, are always going to be inherently political in an era when the ideas of both public service and employee retirement security that doesn’t provide maximum profit to the financial industry are bound to be under constant attack by the organs of neoliberal ideology and corporate special interests.
That much said, though, Bill 27 will certainly help. What’s more, it makes sense from a conservative point of view.
What could be more dangerous from the perspective of protecting the security of any single employee’s retirement savings than leaving them in in the hands of a politician to, essentially, use as whim, partisanship or ideology direct? I’ll tell you what: leaving the collective savings of 300,000 employees, mostly women – literally billions of dollars – in the same inherently untrustworthy hands.
The temptation to meddle is strong when employee savings could potentially be diverted to other uses. As things stand right now, that was too easy with the finance minister as the pensions’ “sole trustee” in law, and decisions about pension benefits made by the minister in consultation with the provincial cabinet.
Arguably, it was a combination of whim, partisan advantage and ideological dogma that tempted Progressive Conservative Premier Alison Redford and her finance minister, Doug Horner, to go after Alberta public sector pensions in the spring of 2014.
Mr. Horner claimed at the time the reason public service pension plans needed to be fiddled with was because they had unfunded liabilities. This was always baloney. Funding arrangements had already been put in place by the plans’ boards to pay down the liabilities in a timely fashion. The largest plan is now in surplus.
In effect, the PCs’ real rationale for the cuts seemed not to have been because we have to, but just because we can!
Regardless, as has been argued here before, Mr. Horner’s arrogant attack on the pension plans was among the most significant causes of the defeat of the PCs by Premier Rachel Notley’s NDP in 2015. And the attack was arrogant: Mr. Horner in effect said, you can co-operate, or you can fight me, but in the end, I’ll do whatever I wish. Well, he got his fight, and it didn’t end exactly as he expected.
Inexplicably, Mr. Horner also threw in a bill that attacked private sector pensions – effectively allowing private-sector employers to arbitrarily break pension agreements with employees and retirees, including collectively bargained contractual plans. That would have been challenged in the courts, and quite possibly overturned. It sure didn’t fit with the divide-and-conquer approach used successfully by governments everywhere. Perhaps that’s what 44 years in power can do to your thinking.
Regardless, a year before the election, the PCs sent the policy introduced under Ms. Redford to the Standing Committee on Alberta’s Economic Future, where problematic bills are often sent to die with dignity. Almost as soon as he was chosen to lead the PCs, premier Jim Prentice dropped both bills like the proverbial hot potato.
But by then it was too late. A public service that historically favoured the PCs by significant majorities had had enough when individual members’ own retirement security was directly threatened.
How passionate were the employees affected? On March 2, 2014, more than 2,000 people protested the Redford Government’s plan in Edmonton’s Churchill Square – for more than an hour in temperatures that were at times -25 degrees Celsius! Many more gathered the same day at other locations throughout the province.
But the history of this week’s legislation goes much farther back than just the events of 2014. It was more than 30 years ago when Alberta’s Conservative Dynasty first promised to put the public service pensions under stakeholder trusteeship.
I can’t find a citation for this, but Ralph Klein’s minister of cutbacks and privatization, Steve West himself, is said to have offered the opinion this made sense from a conservative perspective. Make whatever kind of arrangements you want, he told advocates of joint trusteeship, just remember taxpayers don’t carry the liability any more.
Alas, whatever the reasons, until Mr. Ceci came along, no Alberta finance minister has had the courage or conviction to do the right thing and move the Local Authorities Pension Plan (for health care, education and municipal workers), the Public Service Pension Plan (for civil service members), and the Special Forces Pension Plan (for law enforcement) to a mainstream joint-governance structure like those common in B.C., Ontario and other provinces.
As has often been the case with NDP legislative reforms, Bill 27 won’t put Alberta pension law out there on the cutting edge, but will place it comfortably within the Canadian mainstream with what is widely recognized as the best practice for operating such funds.
Risks to pension plan members, and to the public, have been reduced – and so has the temptation for politicians to treat other people’s money as a potential slush fund for political gain. It fulfills the promise made to public employees 30 years ago, by a Conservative government.
Under joint governance, which is expected to take effect on March 1, a sponsor board of nominees from employee and employer sponsor organizations will govern each plan and be responsible for plan design. New corporations for the LAPP, PSPP and SFPP will be responsible for the overall operation of the plans, with a fiduciary responsibility to act in the interests of plan members.
Yesterday, the United Conservative Party Opposition had wisely not yet staked out its position on this legislation. UCP MLAs say they want to study the bill. Fair enough, although it will be difficult for them to resist the temptation to try to score partisan points by labelling this a pro-labour policy by the NDP.
If they can resist the urge, it will reassure working people with their retirement savings in one of those plans.
As Karen Kuprys, a Registered Nurse and 25-year veteran of Alberta’s health care system, told Tuesday’s news conference: “The integrity of our pension plans is now something that we won’t have to worry about. … I want to be able to always focus on the wellbeing of my patients.”
Public service employment law amendments introduced
Yesterday, the government introduced legislation to amend the constitutionally problematic Public Service Employee Relations Act to bring it into line with the Canadian Charter of Rights and Freedoms.
Bill 29, the Public Service Employee Relations Amendment Act, will remove legacy exemptions preventing civil servants employed as budget officers, systems analysts, auditors, disbursement control officers and hearing officers from being represented by a union. Those changes are to take effect on June 1, 2019.
The legislation would also move non-academic staff at post-secondary institutions from PSERA to the Alberta Labour Code, taking effect on July 1, 2022.
MLA Robyn Luff returns to the House
And speaking of labour issues, rebel MLA Robyn Luff returned to the Alberta Legislature yesterday to sit as an Independent after a short-lived informal job action.
The former NDP MLA for Calgary-East refused to sit in the Legislature for a spell after accusing the government of Premier Rachel Notley on Nov. 5 of bullying and what she called a culture of intimidation. That evening, she was kicked out of the NDP Caucus.
“My constituents have been very clear that they want me to go back and represent them in the Ledge,” she told reporters.
CORRECTION: Alberta municipal firefighters are members of the Local Authorities Pension Plan. Incorrect information appeared in an earlier version of this story. AlbertaPolitics.ca regrets the error.