Confusion plagues public sector pension plans: auditor general

Alberta’s auditor general says there is confusion at the highest levels of the public sector pensions, with the risk it could worsen the current $7.4 billion in red ink the plans are facing.

EDMONTON — Alberta’s auditor general says there is confusion at the highest levels of the public sector pensions, with the risk it could worsen the current $7.4 billion in red ink the plans are facing.

“(There are) many at the wheel without agreement on how far off course they are,” Saher told reporters Thursday after the release of his report.

“Since the year 2000, there have been 10 different ministers of finance,” he said. “They’ve not had the benefit of a well-functioning risk management system.”

Saher couldn’t say conclusively that the management confusion has contributed to the province’s unfunded pension liabilities.

But he said that, in general, clarity reduces financial loss.

“Risk management is not some sort of panacea to make a $7.4-billion unfunded liability just magically disappear,” he said. “(But) without good risk management, the chances of that unfunded liability increasing are greater than they need to be.”

Finance Minister Doug Horner is preparing to introduce legislation as early as next month to overhaul public sector pensions.

Horner said Thursday that the changes include a new fund management structure that gives voice to both employers and employees.

In the meantime, he said, the advice he is getting on pension plans and risks is sound.

“We’re in agreement with pretty much everything (Saher) said, but we’re also in agreement that something has to change,” said Horner.

The unions are strongly opposed to Horner’s changes.

They say he is manufacturing a crisis, citing their own studies that suggest the unfunded liability is already on track to be eradicated. Horner has countered by saying the paydown is predicated on unrealistic investment returns.

Union leader Guy Smith of the Alberta Union of Provincial Employees, said in a news release they remain skeptical of Horner’s intentions.

“We have been left in the dark about the implementation of the planned changes, and the effect it will have on the employees we represent,”said Smith.

“I hope the minister takes the opportunity to correct his course.”

NDP Leader Brian Mason said Saher is missing the big picture, examining “minutiae” of the pension system while avoiding core issues, such as whether the current pension system is sustainable.

“It might be time to do a value for money audit of the auditor general’s office,” said Mason.

The changes being proposed by Horner would take effect on Jan. 1, 2016, but would not claw back benefits already promised to current pensioners.

Benefits earned up to 2015 wouldn’t change but would be reduced marginally starting in 2016. No improvements to benefits would be allowed until 2021, at the earliest.

Alberta’s public-sector pension, spread over four plans, has 200,000 active members and 120,000 retirees.

Also Thursday, Saher rapped the knuckles of some colleges for failing to manage their money and provide proper financial statements.

Saher said Olds College, Northern Lakes College and the Alberta College of Art and Design continue to struggle with money management.

He said Medicine Hat College and Portage College have made some improvements but also need to do more.

Just Posted

Police is still looking for Second World War army passport owner

No one has claimed a rare Second World War German army passport… Continue reading

Rent subsidies for Asooahum Crossing tenants sought from Red Deer city council

Coun. Lee feels the city should be ‘last resort’ for housing subsidy requests

Castor murderer denies he’s a killer

Jason Klaus tells courtroom he loved his family who were murdered in December 2013

WATCH news on the go: Replay Red Deer Jan. 21

Watch news highlights from Red Deer and Central Alberta

RDC chosen to host 2019 men’s volleyball national championship

Sports enthusiasts in Red Deer will have more to look forward to… Continue reading

Police is still looking for Second World War army passport owner

No one has claimed a rare Second World War German army passport… Continue reading

DJ Sabatoge and TR3 Band kick off Sylvan Lake’s Winterfest 2018

Central Alberta’s youngest DJ will open for TR3 Band kicking off Town… Continue reading

Two Canadians, two Americans abducted in Nigeria are freed

Kidnapping for ransom is common in Nigeria, especially on the Kaduna to Abuja highway

WATCH news on the go: Replay Red Deer Jan. 21

Watch news highlights from Red Deer and Central Alberta

Liberals quietly tap experts to write new paternity leave rules

Ideas include creating an entirely new leave benefit similar to one that exists in Quebec

Insurers say Canadian weather getting hotter, wetter and weirder

Average number of days with heavy rain or snow across Canada has been outside norm since spring 2013

Are you ready for some wrestling? WWE’s ‘Raw’ marks 25 years

WWE flagship show is set to mark its 25th anniversary on Monday

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month