TODAYS TELEGRAPH ... NOW YOU KNOW THE REST OF THE STORY.. Todays TJ Teachers did their part Re:“Teacher Pension Top Ups Over,”(Jan. 27). In statements made by Minister Higgs, it appears he wanted to make it seem that the government’s main motivation in making payments over the years has been to help teachers out. These “extra payments” are, in fact, the government repaying money owed to the teacher pension plan, money the government loaned to itself. For the first half century that the teacher pension plan operated, government used the plan’s funds as general revenue. It spent all the teacher contributions but made none as the employer. There was no chance for the plan to grow as it should. All the while though, teachers were reassured the pensions would be there when needed. After considerable teacher effort to change the status quo, starting in the late 1970s, government stopped spending the teacher contributions. Instead they “invested” the money. But the investments were placed in major government infrastructure projects like the PEI bridge. These investments paid only one or two per cent return at a time when other markets were returning over 10 per cent. Again, government action limited proper growth of the fund. In the 1990s, the teachers and government hammered out an agreement to solve the pension issue. Teachers dramatically increased their contributions while the government agreed to extra payments for a 25-year period (which will end in 2017). Presumably when the pension fund was at 100 per cent, they were authorized to take a payment vacation, but when the market took a hit, they were obligated to resume payments until the scheduled end date. Government action and short-sighted policies limited true growth in this pension plan from the outset. Teachers did their part, made their contributions and trusted government reassurances that their pensions would be safe. It’s time government stood by its word. John Cairns WILLOW GROVE
Posted on: Thu, 30 Jan 2014 12:43:47 +0000
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