[Locke]

Originally Posted by V

So I'm really bad at Google, can someone please point me in the direction of this runaway government spending on pensions here in Alberta? I just can't find it.

Kicking Alberta's Unfunded Pensions down the road.

One theory about politics is that because politicians must get votes to stay in power—that’s their “currency”— they are unlikely to act against their own self-interest. So politicians cater to the specific voters who put them in power in the first place.

Previously, reforms to government employee pensions were sold by Horner as absolutely critical, something he repeated recently when he backed off more substantial improvements. He even noted that public sector pension plans “are no longer sustainable in their current form.”

The result to date has been one of two consequences: the direct taxpayer infusions, such as the $1.2 billion top-up in 2009/10 for what’s known as “pre-1992” Alberta Teachers’ Pension Plan (and the government’s assumption of the full unfunded liability in that plan), and hikes in pension plan contribution rates. For instance, increases in Public Service Pension Plan employee/employer contributions took place in 2003, 2007, 2010, and 2012.

Even the Saskatchewan Teachers’ Federation, which runs its own pension plan, has moved away from using averages based on late career earnings to calculate pension benefits. Instead, for that union-run plan, as of 2015, eventual pension benefits will be calculated using career-average earnings.

By again kicking the existing unfunded pension liabilities down the road, the province has exposed taxpayers to future risks and more bailouts, obvious or hidden. The government has also demonstrated that the theory about political behaviour—politicians mostly act in their own short-term electoral interest and not in the long-term interest of the public—is regrettably true more often than not.

https://www.fraserinstitute.org/arti....MdRRTw4Q.dpuf

Canadian governments — slowly, awkwardly and in the usual piecemeal manner — are gradually beginning to address the financial elephant in their shared room, the problem of unaffordable public pensions.

The Alberta proposal would freeze benefit increases until 2021; reduce the rate of cost-of-living increases and set “targets” instead of guarantees; cancel early retirement incentives and reduce benefits for those who retire early; and allow the government to escape automatic improvements during tough times.

Predictably, Alberta’s labour organizations are having a conniption. The unions representing provincial employees are so upset about the plan they scheduled a press conference to respond to the plan for Sunday, 24 hours before the details were even unveiled.

Alberta’s pension has unfunded liabilities of $7.4 billion which, while affordable now, won’t be as the ranks of retirees grows and people collect benefits over longer lives. The number of active workers to retirees has already shrunk dramatically, so fewer people are paying more money to support retirees over a longer period. There’s a limit to how often pension plans can boost payments by active workers or ask taxpayers to foot a larger government contribution, and the market struggles of the past decade demonstrated how uncertain investment growth can be.

It’s simply not sustainable, and union cries that it’s all unfair won’t change that.

Alberta isn’t alone in facing the music. In May, New Brunswick Premier David Alward announced a revamped plan that would increase the retirement age by five years over a 40-year period, base payments on an “enhanced career average” rather than the traditional best-years’ salary, and link cost-of-living increases to the plan’s performance.

“It is not fair or realistic to expect New Brunswick taxpayers to backstop huge swings in pension valuations because of the performance of pension plan investments,” Alward said at the time.

“Taxpayers who don’t have their own pensions are asked to pay more and more taxes for those who do,” he said.

Despite what the unions claim, it’s not a case of governments against their workers. It’s Canadian taxpayers who can no longer afford the bill for richer plans than most of them enjoy. The world has changed since those plans were approved. The numbers are compelling. Like it or not, politicians are being forced to admit as much.

http://news.nationalpost.com/full-co...s-then-who-can

The minister said unfunded liabilities – now sitting at about $7.4-billion for four separate provincial public pension plans – cannot be borne by taxpayers, and the problem won’t be solved with increased contributions or periods of higher investment returns alone.

http://www.theglobeandmail.com/repor...ticle16919469/

And then lo and behold, a mere two months after the NDP are elected:

Alberta government pension plans not in peril after all: union

Alberta public sector pension liabilities dropped by more than $400 million last year, prompting labour leaders to say that’s proof the planned changes to the funds by former premier Alison Redford were never necessary.

In the fall of 2013, Redford’s Progressive Conservative government claimed reforms were needed to address a $7.4-billion unfunded liability in Alberta’s four major public sector pension plans. It proposed to get rid of early retirement incentives and guaranteed cost-of-living increases.

Alberta Finance spokeswoman Carolyn Gregson said the liability for pension obligations for the government, combined with the liability for its commitment towards pre-1992 teachers’ pension obligations, dropped from $10.7 billion in 2014 to $10.3 billion in 2015 — an improvement of $404 million.

“Those unfunded liabilities will move up and down with the performance of the market,” he said. “Investments were strong this year, but they are not strong every year. It could down again next year or it could go back up again.”

PC Leader Ric McIver said a pension plan requires “a whole string of good years — not just one,” and he urged the new NDP government to come up with a plan to address the unfunded liability in its pension plans.

http://calgaryherald.com/news/politi...fter-all-union

It cannot keep on going as it is. The status quo is economically untenable.