New governance proposed for pension plans
New legislation would give employees and employers control of their pensions.
The Joint Governance of Public Sector Pension Plans Act proposes a joint governance structure for three of Alberta’s largest pension plans – the Local Authorities Pension Plan, the Public Service Pension Plan and the Special Forces Pension Plan.
“Our government believes that Albertans who have been paying into their pensions for decades should have control over their pensions. For almost 30 years, successive governments have been making promises to move on these practical reforms and, today, our government is finally making good on those promises.”
“As a retired paramedic with over 30 years of service, it brings me a sense of relief and comfort to hear that our government is at last putting the management of the pension plans into the hands of the employees and employers and out of the hands of the government. I hope this will at last keep our pensions out of politics.”
“Above all else, this legislation represents something so fundamental: certainty and security for my future and my family’s future.”
“I am so happy about this. As a nurse and a frontline health-care worker, I want to be able to always focus on the well-being of my patients. So it’s great that the promise made by the government almost 30 years ago has finally been honoured.”
“Joint governance of pension plans simply makes sense. It gives both employers and employees an equal say in how their pension plan is run. It is a best practice across the country and, as an employer, AUMA is supportive of this governance structure.”
Highlights of proposed legislation and governance structure
- The bill proposes to transition the Local Authorities Pension Plan (LAPP), the Public Service Pension Plan (PSPP) and the Special Forces Pension Plan (SFPP) to a joint governance structure similar to the structure used in other provinces.
- Under joint governance, a Sponsor Board comprising nominees from employee and employer sponsor organizations would govern each plan and would be responsible for plan design (benefits, funding, eligibility, etc.).
- The legislation would also establish new LAPP, PSPP and SFPP corporations, one for each plan. The corporations would be responsible for the overall operation of the plans and have a fiduciary responsibility to act in the interest of plan members.
- The legislation does not introduce any changes to benefits, or how the plans are funded.
- If the bill passes, the anticipated transition date to the new model of joint governance is March 1, 2019.
- Plans would be regulated by Alberta’s Superintendent of Pensions and the Employment Pension Plans Act.
- Ontario and B.C. have also transitioned to joint governance models.