Pension contribution reductions for 2022

WORTH KNOWING
 
Pension Contribution Reductions for 2022
Every year the Alberta Teachers’ Retirement Fund (ATRF) develops an annual report that covers a wide variety of topics, including ATRF’s investment results, funding status, member services statistics and financial reporting. In 2021, ATRF continued to manage the challenges presented by the ongoing pandemic and the transfer of assets to the Alberta Investment Management Corporation (AIMCo), while still providing excellent service to members and excellent value for Alberta teachers and plan sponsors.
 
ATRF’s 2021 annual report, Together Through Change, provides teachers with detailed information on the following topics:

• ATRF’s performance and resilience over the past year during a period of major change
• A discussion of ATRF’s strategic plan
• Results from the most recent member survey
• Detailed information around plan structure and funding
• Funding objectives based on ATRF’s funding policy, and the funding status of the plans
• ATRF’s fund performance
• The transition of assets to AIMCo
•  The announcement of another reduction in contribution rates

 
Management of Contribution Rates
Effective September 1, 2022, the total rates for the Teachers’ Pension Plan will be reduced by two per cent of salaries (one per cent for the Government of Alberta and one per cent for teachers). Several considerations went into this decision, including

• strong investment returns;
• prudent management that continues to build margins and reinforce the plan’s long-term sustainability; and
• the determination that the plan will be able to continue to meet funding objectives of benefit security, intergenerational  equity, and contribution rate stability and affordability.

 
Managing the plan’s funded status requires making long-term decisions that maintain the health of the plan, with proactive measures in place in anticipation of future challenges. There are three main levers for the management of funded status of any pension plan. The first is the level and type of benefits offered, which are the plan sponsors’ decision. The ATRF board manages the two remaining levers to achieve long-term sustainability. First is the funding policy and setting the contributions paid by teachers and the government/employer, which determines how the plan is funded, and second is the investment policy, which sets out how the assets are invested. Contributions and investments provide capital with which to pay plan benefits as they become due and to fund the operations of ATRF.
 
 
WORTH SHARING
ATRF regularly works with the plan’s actuary to assess contribution rates as part of its broader accountability to manage plan sustainability and funding. Effective September 1, 2022, the total rates for the Teachers’ Pension Plan will be reduced by two per cent of salaries, which will result in a one per cent increase to teachers’ net pay. Teachers can access more information in the ATRF 2021 annual report. #WEAREATA