Teachers, students, school boards and taxpayers benefit from solution to unfunded pension liability
Five years labour peace provides stability for education system
Edmonton - The Alberta government and the Alberta Teachers' Association (ATA) have reached an agreement in principle to address the $2.1-billion teachers' pre-1992 unfunded pension liability. Negotiations have been underway since the end of the summer as directed by Premier Ed Stelmach and Minister of Education Ron Liepert.
"This is a positive step forward in providing stability in our education system for students, teachers, school boards and parents," said Premier Stelmach. "For the past 50 years, governments have wrestled with the issue of the teachers' unfunded pension liability. Our government made it a priority to find a lasting solution which balances the interests of teachers, students and taxpayers. We have accomplished that task."
Liepert added, "While there is a significant cost to government to assume the entire pre-1992 liability, the entire education system will benefit greatly from the stability offered by five years of labour peace. With this agreement in principle, we look forward to a more collaborative relationship with the ATA that is focused on improving the learning environment for Alberta's students."
The ATA's Provincial Executive Council has endorsed the agreement in principle; under ATA by-laws the members must now hold a vote on whether to accept the government's offer.
Premier Stelmach noted, "It is my hope that the teachers of Alberta will endorse this deal and that the school boards will work with the local bargaining units to allow us to move forward together and focus on the important challenges in our classrooms and the ongoing learning of students today and in the future."
A key condition of the agreement for government is the requirement for collective agreements between the 62 publicly elected school boards and the local teachers' bargaining units. School boards and school trustees will continue in their role as negotiators for these agreements. While the issues of pay and length of contract are addressed by the agreement in principle, there are still other issues which have to be resolved through negotiations between school boards and local teacher bargaining units.
A copy of the agreement in principle is posted on the Alberta Education website at: www.education.alberta.ca.
As set out in the teachers' pension plan legislation, both the government and teachers will continue to contribute equally (50-50) to the funding of pension benefits, on a go forward basis.
Strengthening the education system is an important part of Premier Stelmach's plan to secure Alberta's future by building communities, greening our growth and creating opportunity.
Backgrounder
Teachers' Unfunded Pension Liability
Agreement in principle highlights
Benefits to teachers
- Government would assume teachers' pre-1992 pension contributions
For all teachers, the province would assume the pre-1992 unfunded pension liability contributions allowing teachers to keep 3.1 per cent more of their pay. Government would assume all of the pre-1992 liability for the Teachers' Pension Plan.
- Five years of labour peace
All 62 collective agreements would have five-year terms to provide stability and predictability for the students, parents, teachers, school boards and the entire education system.
- Lump sum payment
Once collective agreements are ratified, each full-time teacher included in a collective agreement as of April 30, 2008 would receive a lump sum payment of $1,500.
- Teacher pay increases
In exchange for labour stability, teachers would receive a combination of salary and pension contribution reductions equaling 6.1 per cent for the current year. For the remaining four years, the proposed pay increase would be determined by the year-over-year increase in the Alberta Average Weekly Earnings Index. As part of the Government's commitment to find a long-term solution to the pre-1992 unfunded liability, Budget 2007 included $25 million to provide partial coverage of the teachers' portion.
- Minutes of instruction
During the five years covered by collective agreements, the "minutes of instruction" as a term and condition if not already included would not be bargained for or included in the said collective agreements. For agreements with "minutes of instruction", these terms will be continued for the term of the agreement.
- Government and ATA consultation committee
Government and the ATA will establish a consultation committee to enhance professional practice, strengthen the mutual relationship, and contribute to the stability of the education system.
Benefits to school boards
- Guaranteed funding
Under the agreement, government will provide school boards with the funding necessary to meet teacher pay increases for the five-year agreement. As teacher pay is the largest single expense for school boards, this agreement provides financial stability by ensuring funds are available to meet these obligations.
- Budget predictability
The unpredictability in the budgeting process will be minimized as teacher pay increases will be more predictable.
- Effective use of resources
The time and resources of trustees, administrators and teachers can be directed to students in the classroom.
Benefits to students
- Uninterrupted classroom instruction
The agreement ensures a stable learning environment for students.
- Government reaffirms commitment to Class Size Initiative
The Alberta government recognizes that reducing class sizes continues to be important for creating a positive learning environment for our students. The government will continue to monitor class size averages and provide funding for the Class Size Initiative, now in its fourth year, which has already resulted in 2,500 additional teachers for our classrooms.
Benefits to taxpayers
- Potential interest savings
The current funding structure of the pre-1992 unfunded liability could have required government to spend $45 billion in interest costs to eliminate the liability over the next 52 years. This agreement will allow government to consider the options available to save taxpayer dollars by reducing the costs of servicing this liability.
