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Laurie in Question Period

Government Pension Plans

Ms Blakeman: Thank you very much, Mr. Speaker. The Minister of Finance firmly stated that the government pension plans are a defined benefit, and there will not be fewer dollars available to members when they retire. In the short term that may be true, but since the value of the fund has dropped, at some point taxpayers will have to make up the difference in the fund in order for people to get that defined benefit. My question is to the Minister of Finance. How can you ensure that the taxpayers won’t be left with a bill to top up the fund?

Ms Evans: Mr. Speaker, I explained that the pension boards themselves, not this government but the pension boards, define the level of risk and their tolerance for risk when they establish an agreement, a contractual arrangement with AIM, or now AIMCo, to invest their monies. AIMCo is accountable to those pension boards for that quantity of risk that they have undertaken on their behalf. Again, I think it’s important to say that people get the benefits that they subscribe to, and that will not change.

The Speaker: The hon. member.

Ms Blakeman: Thank you. To the same minister. Well, I hope that AIMCo is responsible to all of us and to the minister. The second question: what plans does the minister have to deal with this upcoming unfunded pension liability?

Ms Evans: Mr. Speaker, again, I think that this is assuming things that we should not. I indicated that on paper there were some losses like everybody else in international markets experienced over the last few weeks. Frankly, the local authority pension plans will be available for people when they go to draw down their pensions. It would be much too early to say that this would be an annualized problem. Let’s look at the heritage fund, which has had an anticipated real rate of return of 4.5 per cent and over five years up until this year averaged 11.1 per cent. We have ups and downs in the market.

The Speaker: The hon. member.

Ms Blakeman: Thank you. Again to the same minister: given that this government got out of control on the unfunded liability for the teachers’ pensions and Albertans will pay an unknown but vast amount of interest over time to make up for the shortfall, how quickly can the minister and the government move this time to avoid the same scenario?

Ms Evans: Mr. Speaker, that’s like comparing apples and oranges. Frankly, this government negotiated with the Minister of Education on the teachers’ unfunded liability, an arrangement that was a shared responsibility in the first instance, and followed through with a satisfactory agreement. To compare either one is just not prudent or appropriate.