The Alberta government tabled new pension legislation Tuesday proposing a joint governance structure for three of the province’s largest pension plans —the Local Authorities Pension Plan, the Public Service Pension Plan and the Special Forces Pension Plan.
“Our government believes that Albertans who have been paying into their pensions for decades should have control over their pensions,” said Joe Ceci, president of the treasury board and minister of finance, in a press release. “For almost 30 years, successive governments have been making promises to move on these practical reforms and, today, our government is finally making good on those promises.”
Under joint governance, a sponsor board comprising nominees from employee and employer organizations would govern each plan and would be responsible for plan design, including benefits, funding and eligibility. The legislation also intends to establish new LAPP, PSPP and SFPP corporations, which would be responsible for the overall operation of the plans and have a fiduciary responsibility to act in the interest of plan members.
“Joint governance of pension plans simply makes sense, said Barry Morishita, president of the Alberta Urban Municipalities Association. “It gives both employers and employees an equal say in how their pension plan is run. It is a best practice across the country and, as an employer, AUMA is supportive of this governance structure.”
If the bill passes, the anticipated transition date to the new model of joint governance is Mar. 1, 2019. The Alberta Investment Management Corp. will continue to serve as the investment manager for each of the three pension plans.