PENSION PLANS INTEGRATED (i.e. The Promise made by the Government of Alberta in 1965 just before the
integration of the two pension plans on January 1, 1966. This notice was distributed to all Alberta Civil Servants.)
THE MOST recent piece of 'hot' news—which affects the An employee with the same service record, earning $10,
great majority of employees of the Provincial Government— 000.00 per annum, would contribute as follows: 'Alberta'
was the announcement by the government that the Public Pension Plan—
Service Pension Act will be integrated with the Canada Pen- 3.5% of $5000.00 .............................. $175.00
sion Plan, effective from January 1, 1966. Salary in excess of $5000.00—
To a number of employees this apparently infers that much 5% of $5000.00 ..................................... 250.00
more money will be contributed by them to the combined Canada Pension Plan—maximum .......... 79.20
pension plans and that the end result will not be too satis-
factory. As the following examples show, the employee $504.20
stands to gain by the integration of the two plans. or 5.04% of salary!
Very briefly, the results of integration can be summarized Under the same conditions, this employee would receive
as follows: benefits as follows:
Effective from January 1, 1966, contributions will be made 'Alberta' Pension Plan—
as follows: 3.5% on the first $5000.00 salary and 5% on 25 years x 2% x $10,000.00 ................. $5000.00
all earnings in excess of $5000.00 to a maximum of 10 years x 1.4% x $5000.00 ................. 700.00
$16,000.00, will be directed to the 'Alberta ’ Pension Plan. Salary in excess of $5000.00—
In addition, 1.8% will be paid to the Canada Pension Plan 10 years x 2% x $5000.00 ................. 1000.00
on all earnings in excess of $600,00, to a maximum of Canada Pension Plan—maximum .......... 1250.00
$5000,00, per year.
All benefits earned up to, and including, December 31, $7950.00 or
1965, remain with the employee, i.e. 2% for each year of 79.5% of salary!
contributory service to a maximum of 35 years, times the In the Regulations accompanying Order-in-Council
average earnings of the five highest years, whether they 1913/65 authorizing the integration of the two Pension Plans,
be prior to, or subsequent to, December 31, 1965. there are provisions covering employees who will be retiring
Benefits from the integrated Plans covering service sub in the near future. These state that "(a) when an employee
sequent to January 1, 1966, will be calculated as follows: retires from' service, and he is not and will not be entitled
For those employees whose average earnings in the five to benefits under the Canada Pension Plan, he (hall receive
highest years do not exceed $5000.00, their pensions will under the Public Service Pension Act the same level of pension
be based on 1.4% for each year of contributory service, benefits that he would have received had integration of the two
plus the benefits from the Canada Pension Plan; for em- plans not taken place, and (b) when an employee retires from
ployees whose average salary is in excess of $5000.00 but the service before being eligible for pension benefits under the
does not exceed $16,000.00, they will receive a further 2% Canada Pension Plan, his pension benefits under the Public
per year of contributory service for the amount in excess Service Pension Act may be combined with the actuarial equi-
of $5000.00. In other words, an employee whose average valent of the Canada Pension Plan benefits which he had
salary is $5000.00 and who has contributed for 35 years earned at the time of retirement, and such combined benefits
would receive benefits calculated as follows, based on the shall be reduced, when he reaches eligibility age for benefits
assumption that 25 years of service were completed prior under the Canada Pension Plan, by the amount of the Canada
to January 1, 1966 (the date on which the Canada Pension Pension Plan benefits earned at the time of retirement."
Plan comes into force) and the balance of ten years of The Hon. A. O. Aalborg, Minister in charge of
service subsequent to that date. Personnel, in a letter to the Association dated October 27,
'Alberta' Pension Plan— states in part that 'the benefits available to members of
25 years x 2% x $5000.00 $2500.00 the Public Service after integration will not in any
10 years x 1.4% x $5000.00 700.00 Instance be less than the benefits presently available
Canada Pension Plan—maximum 1250.00 before integration'.
In Section 2 of the regulations under the Public Service
$4450.00 Pension Act, it is stated, in error, that "(the normal pension)
or 89% of salary! in respect of service on and after January 1, 1966, shall be
During the period of contributory service under both calculated at 1.4 per cent of the average rate of salary for
Plans, the same employee would have contributed an- each year of service ........... " This has been clarified and
nually as follows: will be amended to read that the pension will still be based
'Alberta' Pension Plan— on the five years during which the employee'* salary was high-
3.5% of $5000.00 $ 175.00 est, and not on the average for each year of service.
Canada Pension Plan—1.8% of $4400.00 79.20 All Branch Chairmen and Secretaries, members of the Pro-
vincial Executive are in possession of copies of the Order-in-
$ 254.20 Council and the Regulations, and any members interested
or 5.08% of salary! in reading these should contact one of their branch officers
or Provincial Executive member. •
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