Minister Horner responds to Alberta Auditor General report

“We accept all of the Auditor General’s recommendations, which reflect their analysis that was completed in July 2013. Since that time we have continued work toward improving the public pension system.

“I am pleased that the Auditor agrees with us that Alberta’s public sector pension plans face significant funding challenges that do need to be addressed.  These defined benefit pension plans face the same pressures as those in other jurisdictions. People are living longer and collecting pensions for longer, the ratio of workers to retirees is changing and interest rate trends continue to be lower than in the past. These realities continue to drive up pension costs.

“The Auditor has also found that the department has indeed completed significant research and analysis on plan design, governance and sustainability risks as part of our pension plan sustainability review. In addition, we have continued to consult with stakeholders since the Auditor’s work was completed. I have committed to Albertans that every reasonable idea is being considered as we move forward with strengthening these pension plans for the long term.

“Our focus over the next two years will be on implementing pension reform changes, including the transition from government sponsorship to joint sponsorship by employers and employees under a particular plan. A new risk management system will form part of this process.

“As we finalize our legislation heading into Spring Session, our approach will continue to be moderate and fair to all plan members, employers and taxpayers. I have said all along the changes we make will not affect benefits already earned or change the core benefit formula. Changes are being made to ancillary benefits so that we can in fact protect the core benefits of these plans. It’s important to note that whatever changes are made, they will not affect benefits received by current retirees, including their cost of living adjustments.

“I encourage all plan members to continue to visit pensionsustainability.alberta.ca for the latest information.”