  It’s that time of year again: Alberta Teachers’ Retirement Fund (ATRF) annual plan member statements are being distributed. Employers have submitted their year-end data, and the ATRF has begun producing and mailing statements to plan members. For many teachers, one item on the statement is the commuted value (CV). The CV is shown if you are eligible—that is, if you are under age 55 and have more than five years of pensionable service. Given some recent online commentary, it is important to clarify what a CV is, what it is not and what recent changes do—and do not—mean. What Is a CV? A commuted value is the lump sum that would need to be set aside today, at current market interest rates, to fund your future pension payments. The CV is offered only as a termination benefit, when a plan member’s employment ends and their participation in the plan ceases. It is available only if the member is under age 55 at termination. At that time, the member receives a termination benefit package outlining their options. One option may be to receive the CV as a one-time lump sum payment rather than a lifetime monthly pension. If a member elects the commuted value, • they withdraw the full actuarial value of their pension benefit, • they no longer have future entitlements under the ATRF plan, and • their future retirement income becomes dependent on how that lump sum is invested and drawn down. Each option carries different risks and features. Careful consideration is essential. How Is the CV Calculated? The CV is calculated using the following factors: • Age • Pensionable service • Pensionable salary • Actuarial assumptions, including interest rates, inflation and mortality When determining CV, the ATRF follows the standards of practice established by the Canadian Institute of Actuaries. Why Does the CV Change? The primary driver of changes in CV is interest rates: • When interest rates decline, more money must be set aside today to fund the same future pension. Thus, CVs increase. • When interest rates rise, less money needs to be set aside today. Thus, CVs decrease. In periods of substantial interest rate increases, a member’s CV may be lower than the prior year’s value—even if they have accumulated additional service. This change reflects current market interest rates, not a reduction in earned pension. Does a Change in CV Affect My Pension? No. As long as your pension remains in the ATRF plan, changes to your CV do not affect your lifetime pension benefit. Your pension is determined by the following: • Your highest five-year average pensionable salary • Your pensionable years of service Your pension is not determined by the CV, annual investment returns or short-term interest rate fluctuations. Your future retirement income depends on market performance only if you terminate and choose to withdraw the CV. Does a Change in CV Indicate the Health of the Plan? No. Changes in CV reflect interest rate movements. They are not indicators of plan health. Plan sustainability is maintained through • long-term funding assumptions, • prudent risk management and • ongoing actuarial oversight. Clarifying Misinformation: CV and AIMCo Misinformation online has suggested that recent changes in CV are connected to the Alberta Investment Management Corporation (AIMCo) or the 2021 Investment Management Agreement (IMA) between the ATRF and AIMCo. This is incorrect. CV calculations are governed by actuarial standards and driven primarily by market interest rates. They are not determined by AIMCo and are not affected by the IMA. The IMA ensures that • the ATRF Board retains full authority over the strategic investment policy for plan assets, • AIMCo is required to implement that policy, • clear governance guardrails are in place and • asset management is aligned with the best interests of ATRF plan members. The ATRF has publicly stated that the IMA documents a solid governance arrangement and establishes appropriate safeguards governing AIMCo’s management of plan assets. While teachers may have broader concerns about governance structures or public policy decisions, changes in CV are not connected to AIMCo or the IMA. WORTH SHARING • A commuted value (CV) is a termination option—not your pension. • CV amounts fluctuate primarily because of interest rate changes. • Changes in CV do not reduce your earned pension if it remains in the plan. • CV changes are not indicators of plan health. • CV calculations are not connected to the Alberta Investment Management Corporation (AIMCo) or the 2021 Investment Management Agreement (IMA). If you are considering terminating your employment or electing a CV, review your Alberta Teachers’ Retirement Fund (ATRF) termination package carefully and consider seeking independent financial advice. For general pension questions, contact Teacher Employment Membership Support (TEMS) or the ATRF directly. For questions about employment termination, contact TEMS at 1-800-2327208. Read the full Worth Knowing. #WeAreATA  Comments are closed.
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February 2026
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