By Jim Selby, AFL Staff

On January 24, 2000, the government, represented by Deputy Provincial Treasurer Peter Kruselnicki, Director of Pension Policy Grant Robertson, and Ken Boessenkool, Assistant to Stockwell Day, explained the government's position on the future of the largest public pension plan in Alberta.

Labour participants at the meeting were not impressed with the government position - which is spelled out in the working paper: New Governance Model for the Local Authorities Pension Plan.

The proposed governance model is based upon the report of the consultants retained by Treasury to analyze the LAPP move to independence following the denial of the Employer/Labour backed LAPP proposal for independence in the spring of 1999.

The government working paper is strongly committed to splitting the functions of the current LAPP Board into two groups: a Sponsors Group made up of ‘cheque writers’, and a Trustees group that will be named by the Sponsors group.

Another focus of the working paper is the government’s clear intent to restrict any use of a surplus to improve pension benefits. They propose a double bind wherein 75% of their proposed Sponsors group must approve any benefit improvement, a subsequent one-year waiting period, and then a further vote of 50% from employers representing at least 75% of employees and a 50% support from all bargaining agents.

There is no such restriction proposed for the use of a surplus to grant contribution holidays or simply to disburse such surplus to the stakeholders.

Although exit from the LAPP is to be made as easy and fair as possible, entry will be very restricted under the government proposal. Only public sector employers may join the plan – although that apparently excludes institutions like nursing homes which, although privately owned, receive up to 90% of their funding from the government. This means that, as government privatizes, the LAPP will lose members with very little chance of recruiting new participants.

It quickly became clear in the meeting that labour has some major reservations about the government proposal.

The need for a separate sponsors group and trustees group was questioned. Moreover, the proposed powers and responsibilities of the two bodies came under criticism.

The government is not giving up final control – as originally agreed when the employers and bargaining agents took responsibility for the accumulated deficit.

The inherent bias against benefit improvements and the accompanying bias toward distribution of surplus (either directly as a payout or indirectly as contribution holidays) was a point of contention.

However, labour participants agreed to take the information back to their respective unions for discussion.

A smaller working sub-committee was struck to come up with an action plan based upon the general wishes of the participating unions.