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Employees protest in front of MacHall.
Louie Villanueva/the Gauntlet

Provincial government looks at cutting support staff pensions

Finance minister says cuts needed to keep pension fund afloat

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The union representing support staff at the University of Calgary has started protesting changes to their pension plans made by the Alberta government.

The Alberta Union of Provincial Employees (AUPE) represents most non-academic and non-administrative staff on campus, including caretakers, IT specialists and trade workers. Under proposed changes by Alberta finance minister Doug Horner, staff at the U of C would have to work an extra five years to receive their pensions or lose up to 25 per cent of it for their remaining years.

As it stands, employees have to work 30 years to get their full pension, which is on average $14,500 a year. Under Horner’s new plan, the sum of your age and years of work would have to be 90 or greater to receive the pension in full, up from the former 85.

If workers choose to retire early, the penalty is now five per cent per year instead of three.

“Just to use a round simple number, let’s say you have a pension that is $1,000 a month that you’ve paid into for your entire career,” said AUPE spokesperson Mark Wells. “If you were 60-years-old and only had 25 years of service instead of 30, your pension would be reduced by 25 per cent, or $250 a month.”

The changes will also reduce automatic pension increases tied to inflation. Before, pensions were automatically raised to cover 60 per cent of cost of living increases. This will drop down to 50 per cent.

The new plan would make this increase dependent on the financial performance of the pension fund, though Wells said Horner did not specify what constitutes a good or bad performance.

“Basically, this means that if the finance minister deems that the pension plan has had a bad year, they can opt out of paying the cost of living adjustments,” he said.

In a letter sent to AUPE members, Horner said the changes were necessary for the government to maintain pension coffers.

“Alberta’s public sector pension plans are facing challenges such as low interest rates, uncertain investment returns and people living longer in retirement. As a result, the plans are no longer suitable in their current form,” reads Horner’s letter.

According to Horner, Alberta has around $7.4 billion in unfunded liabilities.

But local AUPE representative Kevin Berry thinks his union is making reasonable demands.

“All we’re asking for is a moderate income after years of work so we can live somewhat comfortably when we retire,” Berry said.

The AUPE has around 82,000 members across the province.

The changes were made without consulting the AUPE.

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