The Alberta Teachers’ Association

The history of the Alberta Teachers’ Pension Plan

The year 1939 was a historical one for teachers in Alberta. On March 31 of that year, the Alberta legislature passed the Alberta Teachers’ Retirement Fund Act, which established a pension plan for teachers. The Alberta Teachers’ Retirement Fund (ATRF) began operations in space leased from the Alberta Teachers’ Association in the Imperial Bank Building at 101 street and Jasper Avenue in downtown Edmonton.

John W. Barnett (for whom Barnett House is named) served as ATRF executive director from 1939 to 1946 and was also secretary-treasurer of the ATRF board. The board’s first meeting was held on Friday, May 5, 1939. This first board was instrumental in establishing the policies and practices that formed the basis of the first teachers’ pension organization.

First retirees

The first three teachers to retire with a pension from the ATRF retired on Dec. 31, 1939:

1. Miss Jean A. Topp, after almost 46 years of teaching
2. Mr. C.E. Brandow, who taught in Ontario then Canmore and Lethbridge
3. Mrs. Elsie A. Smith, after 36 years of teaching

ATRF pension through the decades

1940s

• In 1940, 5,844 active teachers belong to the plan.
• Pension contributions are three per cent of salary.
• The average annual salary in 1949 is $2,280.
• First pensions are provided at $25 per month.

1950s

• In 1954 the fund is valued at $10.6 million.
• Pension contributions are five per cent of salary.
• The average annual pension is $1,575.

1960s

• The ATRF board develops a plan for integrating the ATRF pension with the Canada Pension Plan (CPP).
• The first interprovincial reciprocal transfer agreement was reached between Alberta, British Columbia, Ontario and Saskatchewan.
• Private school teachers are permitted to participate in the Teachers’ Pension Plan as of 1965.

1970s

• Unreduced early retirement pensions are introduced
  using the formula age + service = 100.
• In 1977 this is later reduced to age + service = 85.
• Pensions are adjusted for cost of living.
• Teachers’ average retirement age is 62.

1980s

• Maternity leave now counts as service eligible for purchase.
• In 1987 the fund is valued at $440 million.
• The average annual pension is $10,000.

A new structure

The 1990s saw a substantial change to the Alberta Teachers’ Pension Plan with a new governance structure commencing in 1992. Due to an unfunded liability that had grown substantially, a memorandum of understanding was reached that permitted the ATRF to make significant changes in structuring the contribution rates, addressing cost-of-living-adjustments and shifting the plan to a position of self-funding over the long term. These changes helped address plan funding and worked toward reducing the plan’s unfunded liability.

1990s highlights

• In 1992 there are 31,700 active members and 9,344 retired members.
• In 1995 new legislation established two plans: the Teachers’ Pension Plan and the Private School Teachers’ Pension Plan.

2007 Memorandum of Agreement

Due to the unfunded liability in the plan, and increasing contribution rates, the Government of Alberta allocated $25 million in April 2007 to reduce teachers’ contribution rates.

The agreement saw the government assume the teachers’ unfunded liability contribution of 3.1 per cent from January 2008 to August 2009.

In accordance with the terms of the memorandum of agreement, on Sept. 1, 2009, the Government of Alberta took responsibility for the entire unfunded liability for all teaching service prior to 1992. This meant that teachers who retire with service prior to 1992 have their pension (or the portion of service prior to 1992) guaranteed by the government.

Facts from the 2000s and 2010s

• In 2000 the fund value is $2.3 billion.
• In 2001 pension payments for 14,831 retired members is $307 million.
• In 2014 the average age of retirement is 60.
• In 2014 the contribution rate is 13.46 per cent of salary.
• In 2014 the average annual pension is $38,472.
• In 2015 there are 39,997 active members and 26,308 retired members.

Pension Fund in 2016 and beyond

The 2015/16 fiscal year that just concluded saw an increase in the fund’s value to approximately $13.4 billion. Effective Sept. 1, 2016, and for the first time since 2007, the contribution rates for both public and private school teachers were reduced.

The ATRF continues to work toward increasing service to members and delivering on the pension promise to all members.

Tanisha Tetz is the manager of corporate communications for the Alberta Teachers’ Retirement Fund.