Status: Bill 27 passed Dec. 5, 2018
Ministry responsible: Treasury Board and Finance
The Joint Governance of Public Sector Pension Plans Act will transition the Local Authorities Pension Plan, the Public Service Pension Plan and the Special Forces Pension Plan to a joint governance structure.
Under joint governance, employee and employer groups will share control of plan design and responsibility for the financial health of the plan. Prior to this legislation, government had final approval on changes to the pension plans, including benefits.
New joint governance structure
The new legislation will:
- give employee and employer stakeholders equal say in how their pension plans are managed and equal control over plan design (benefits, rules, eligibility and contributions)
- separate pension plan functions and clearly define roles and responsibilities
- create a sponsor board for each plan, with an equal number of seats assigned to employee and employer sponsors
- each plan will have its own corporation that would perform administrator and trustee functions
- allow employee groups and employers to nominate representatives to sit on their sponsor boards as well as the board of directors of the corporations, with no final approval required from government
- continue plan services with AIMCo and Alberta Pensions Services for a period of 5 years, after which the corporations can choose to carry on with those service providers or consider new options
- introduce protections for plan members to remain in their plan if there is an employer restructuring
Employees and employers determine benefits, not government.
The new legislation only changes the governance structure. There will be no change to how plans are funded or plan benefits.
Under the new 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, the Local Authorities Pension Plan (LAPP), Public Service Pension Plan (PSPP) and Special Forces Pension Plan (SFPP) will transition 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
- 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
If you have questions about the changes, please contact email@example.com
- New governance proposed for pension plans (Nov. 20, 2018)