Newsrelease

June 23, 1998
Edmonton, Alberta

"Our pension reforms are working. In a matter of weeks, employees and employers will see their Local Authorities Pension Plan pension surcharge end. The laws we put in place in 1993 to pay down our unfunded pension obligations are delivering results, well ahead of schedule."

LAPP Unfunded Liability Reaches Zero

Alberta’s share of the unfunded liabilities for the Local Authorities Pension Plan (LAPP) has been eliminated. These savings will improve the province’s bottom line by $11 million for the fiscal year 1998-99. It also saves Alberta taxpayers $11 million a year or $257.9 million over the next 38 years -- the time frame of the original agreement between the LAPP and government to take care of the unfunded liability of this pension plan.

"The Local Authorities Pension Plan Board advised me that the LAPP is now fully funded," said Provincial Treasurer Stockwell Day. "I can’t tell you how pleased I am about this improvement. It is more than good news for the province. It means $25.6 million in combined surcharges paid by employees and employers will end September 1. To an employee earning $35,000, it’ll mean $180 more in their pocket every year."

The improvement to this liability picture can be credited to several factors including government cost control and restructuring, better than assumed investment performance, and implementation of a sound financial framework by the pension board. This improvement in liabilities will be reflected in the province’s First Quarter Report in August.

The LAPP will advise its plan members and employers of this positive news at town hall meetings and by mail later this week.

For more information, please contact:

Trish Filevich
Director of Communications
Alberta Treasury
Telephone (780) 427-5364
e-mail: webmaster@treas.gov.ab.ca

or

Richard West, Chairman
Local Authorities Pension Plan Board
(780) 425-1025

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