Alberta Politics

Albertans defend modest pensions, Redford staff defend Palm Springs flight

Rally for Pensions Alberta
Close to 2,000 Albertans gathered in Churchill Square on March 2, 2014 to rally for secure public sector pensions.

About 2,000 Albertans from every corner of the province braved the -33C windchill yesterday to defend their modest pension plans at a rally in Edmonton’s Churchill Square. Many municipal and provincial employees are concerned that Finance minister Doug Horner‘s proposed changes to Alberta’s public sector pension plans could impact their retirement security.

David Eggen Deron Bilous NDP MLA Alberta
NDP MLAs Deron Bilous and David Eggen show their support at yesterday’s rally.

Despite rhetoric about ‘gold-plated pension plans,’ the average full pension under the Local Authorities Pension Plan is only $15,000 per year.

Meanwhile, Premier Alison Redford is facing questions about another taxpayer funded flight on a government plane, this time from sunny Palm Springs, California.

After receiving a tip about a suspicious record in the Alberta Government Flight Manifests, I asked Ms. Redford on Twitter why a government plane flew empty to Palm Springs and returned to Calgary with her, her daughter and two members of her security detail onboard in April 2013.

David Climenhaga Laurie Blakeman Liberal Alberta MLA
Blogger David Climenhaga and Liberal MLA Laurie Blakeman at yesterday’s rally.

Ms. Redford did not respond to my tweet, but her communications director Stefan Baranski did. He explained that the flight brought the premier back to Alberta from her vacation home in order to attend former premier Ralph Klein‘s memorial service.

While the cost of the $9,200 flight to and from Palm Springs is not as salacious as Ms. Redford’s $45,000 flight to South Africa, it is unclear why the premier did not return to Alberta on one of the many commercial flights available in the six days before the memorial service.

Both the Calgary Herald’s Don Braid and the Calgary Sun’s Rick Bell have penned articles in response to Ms. Redford’s Palm Springs flight.

Here’s the original tweet I sent on February 27, 2014:

Speech from the Throne & Budget
A Speech from the Throne will open the spring sitting of Alberta’s Legislative Assembly today at 3:00 p.m. The 2014 provincial budget will be tabled by Mr. Horner on the afternoon of Thursday, March 6.

NDP to nominate the first candidate of the 2016 election
As was first reported last week on this blog, the Alberta NDP will hold a candidate nomination meeting on March 4 in the Edmonton-Riverview constituency. The NDP are expected to nominate Lori Sigurdson, manager of professional affairs with the Alberta College of Social Workers, as their candidate. The constituency is currently represented by PC MLA Steve Young.

5 replies on “Albertans defend modest pensions, Redford staff defend Palm Springs flight”

We have been duped by this woman and the more we know, the worse it gets. I used to be one of the few people who trusted that politicians actually have good intentions and want to do what’s best for most people, but now I belong to the large community of synics who say that they’re only in it for themselves. Karma’s a bitch, ms. premier.

The historical record suggests that politicians on the whole are rather ruthless and not to be trusted. Nonetheless Albertans demonstrated a collective lack of sophistication in believing Redford’s platform in 2012. She claimed that she was going to spend money in a variety of social ways, on the surface more money than the NDP and Liberals were planning to spend in their rather conservative platforms. Yet she insisted that she was not going to raise taxes at all. Obviously, she was lying about something, if not everything, and she represented a party that had hacked to pieces our social programs for a generation. But all sorts of people believed her and voted for her, including people who want more program spending than the parties to the left of the Tories offer.

Disappointed by your comment “Despite rhetoric about ‘gold-plated pension plans,’ the average full pension under the Local Authorities Pension Plan is only $15,000 per year.”

The real pension issue is not about the size of the pension, it’s about how the pension is funded. Suppose employee/employer contributions average, say, $1,000 per year for 35 years, and then the employee retires and draws that $15,000 per year pension. If the pension contributions had been invested at an average return of 5%, then there will be enough in the pension fund to support the pensioner for about 7 years. That would have been fine 35 years ago, when the average pensioner retired aged 65 and the average life expectancy was 72. Today, however, the average pensioner retires aged 60 and the life expectancy is 81 (StatsCan figures). That means the pensioner is drawing an indexed pension for 21 years instead of 7 years. Clearly this is not sustainable, particularly when projecting life expectancies out for the next 20 or 30 years.

NOTE: I’m using approximations to illustrate my point, and I understand there are lots of caveats here:
• Is a 5% investment return reasonable? I understand fluctuations in the markets, but on a long-term basis, most investors find 5% in adjusted dollars to be very reasonable.
• Couldn’t pension contributions be increased to $1,500 or $2,000 per year? Part of the contribution is from the employer, i.e. the government. What this really means is suggesting an increase in the overall compensation package to be paid to the employee.

As for the reference to “gold-plated” pensions, that seems to be the Canadian Taxpayers Federation’s perspective . The CTF identifies ‘guaranteed benefit’ pension plans as being inappropriate, proposing instead the ‘guaranteed contribution’ pension plan. The “guaranteed benefit” pension plan is simply a transfer of risk, and any risk has an associated cost. Again, the issue for the CTF is cost (taxes).

Of course, the CTF has very little credibility in this debate. It has a knee-kerk reaction toward any discussion of the public service because the CTF’s sole purpose is to minimize taxes. Its ideal state would result in a mind-numbingly oppressive reduction in public services. On the other hand, the union has limited credibility as well, because of its mindless opposition to any change that puts less money in the hands of its dues-paying membership.

In response to the commenter Dave, I pay into PSPP. If we were to change annual pension contributions to $1500 or $2000 a year I’d be saving at least $4000 or $4500 annually. Our current contributions are massive, and I’m ok with that, because I expect my pension to be there when I retire and I’m willing to pay what’s necessary to get there. What I’m not ok with is having the terms of my pension unilaterally changed.

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