Government breaks promise on pension plan

Jim Selby, AFL Staff

Unions and employers were informed in December that the memorandum of understanding they had reached on the Local Authorities Pension Plan (LAPP) was unacceptable to Alberta Finance.

Les Steel, Chair of the Labour Coalition on Pensions, although not surprised by the government’s action, was nonetheless unhappy with the response.

"People have to remember that employees and employers have had sole responsibility for any unfunded liabilities in the LAPP since 1991 – the year the government agreed to give us [stakeholders] governance of the plan in exchange for workers and employers assuming higher contribution rates to pay off a huge unfunded liability," said Steel.

According to Steel, the stakeholders having been trying ever since to get the government to live up to its half of the deal. "Every single Treasurer has repeated the promise that employers and employees would be given independent governance of the plan," he said. "But there always seems to be some reason why government can’t or won’t live up to that promise."

The latest round of negotiations began after government officials hired Ontario consultants to prepare a report on future independence for the LAPP. The consultants did not meet with either employers or employee representatives, and their report reflected only the government’s position.

At that point, the labour coalition on pensions brought out one of Canada’s most respected pension specialists, Murray Gold to prepare a labour response to the government’s tame consultants.

Former Provincial Treasurer Steve West like labour’s proposals, paving the way for a landmark memorandum of understanding in September 2001.

"Unfortunately, as soon as Steve West was gone, finance officials reverted to their old position – and have refused to honour the agreement made by employers and labour," said Steel. "The labour coalition is now considering several options including legal action against the government."

"We are starting to believe that government never had any intention of living up to their promise of independent governance – and that workers and employers paid off the huge unfunded liability under false pretenses."