Status: Bill 27 passed December 5, 2018
Ministry responsible: Treasury Board and Finance
Overview
The Joint Governance of Public Sector Pension Plans Act transitioned the Local Authorities Pension Plan (LAPP), the Public Service Pension Plan (PSPP) and the Special Forces Pension Plan (SFPP) to a joint governance structure.
Under joint governance, employee and employer groups share responsibility for the design and financial health of the plan. Prior to this legislation, government had final approval on changes to the pension plans, including benefits.
Joint governance structure
The legislation, applicable only to LAPP, PSPP and SFPP:
- gives employee and employer stakeholders equal say in the design and management of their pension plans (benefits, rules, eligibility and contributions)
- separates pension plan functions and clearly defines roles and responsibilities
- creates a sponsor board for each plan, with an equal number of seats assigned to employee and employer sponsors
- each plan has its own corporation that performs administrator and trustee functions
- allows employee groups and employers to nominate representatives to sit on their sponsor boards as well as the board of directors of the corporations
- continues plan services with AIMCo and Alberta Pensions Services
Plan benefits
Employees and employers determine benefits, not government.
The legislation only changed the governance structure. There will be no change to how plans are funded or plan benefits.
Under the joint governance structure, future benefit plan changes will be determined by sponsor boards, not government, and will be subject to discussion and agreement between employer and employee sponsors.
Employee and employer sponsors will also share responsibility for the risks associated with funding defined benefit plans, including the risk of investment losses that may require changes to contribution rates and/or benefits.
Retired member benefits will not be affected, and sponsor boards will be required to consider the interests of retired plan members before making decisions.
The plans will be registered under the Employment Pension Plan Act (EPPA) and subject to regulatory oversight by the Superintendent of Pensions.
Regulations and proclamation of remaining legislation provisions
On March 1, 2019, the LAPP, PSPP and SFPP transitioned to joint governance in accordance with the Joint Governance of Public Sector Pension Plans Act.
In early 2019, a number of regulation changes also occurred in support of joint governance implementation, including changes to:
- maintain plan benefits and funding during the transition
- transfer administrator and trustee functions to the new pension corporations
- update the list of participating employers in each plan
- make technical amendments to various other regulations to ensure alignment and consistency
Quick facts
- Total number of affected employers: 450
- Total value of affected plans' assets: $59.3 billion
- Total number of affected plan members (active, deferred and retired): 351,210
*As of December 31, 2017
Contact
Public sector pensions
Contact the following for information on:
- Alberta Teachers’ Pension Plans: Alberta Teachers’ Retirement Fund Board
- Local Authorities Pension Plan: LAPP Contact
- Public Service Pension Plan: PSPP Contact
- Special Forces Pension Plan: SFPP Contact
- Universities Academic Pension Plan: UAPP Contact
- All other Alberta Public Sector Pension Plans: Alberta Pensions Services Corporation
- Federal pension plans: Canada Pension Plan or Old Age Security
News
- New governance proposed for pension plans (November 20, 2018)
Compensation disclosure
Public sector bodies are required to post online the names and compensation paid to all board members, regardless of the amount. This disclosure is a requirement under the Public Sector Compensation Transparency Act.
View the compensation disclosures for the LAPP, PSPP and SFPP Corporations (established in 2019), and the previous pension boards, which were dissolved in 2019.