Manitoba Teachers Loving NDP Going Into Election

August 29, 2011
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Manitoba has a complicated set-up for the teachers pension (TRAF). They have two pension accounts one for employee contributions and one for employer contributions. They are both calculated separately.

The teacher’s pension does not appear that it have any pension shortfall problems as the government made a $1.5 Billion balloon contribution into the plan in 2007. The Education budget for 2011 is only $1.75 billion!

Despite the top up the government is on the hook or another $800 million currently on their public accounts statement and the last valuation for the pension shows $391 million … these things never end.

Teachers are loving the NDP in Manitoba! Do I smell an election int the air???

It was a waste of taxpayer money to pay for the last valuation on the Teachers plan. It showed that for the plan to remain solvent requires a big increase in teachers annual contributions into the plan.

Currently teachers are paying 6.8% and 8.4% in their pensions. The valuation report in 2009 showed that contributions should be 12.4% and 14.0%. So they are currently half of what they should be to keep the plan afloat. Of course the government does not want to force this issue on teachers, there might be labour strife!

http://www.traf.mb.ca/index.php/your-pension/activedeferred-members/pension-basics/required-contributions

Page 3 – http://www.traf.mb.ca/images/stories/Funding/Actuarial_Valuation_January-1-2009.pdf

Pension Funding
In annual payments into the pension, teachers are funding 18% of the total annual contributions. Last year taxpayers pumped in $17 million and teachers contributed $74 million.

Over the past 10 years it has been $ 1.17 billion for taxpayers and $603 million for teachers. If we add in the balloon payment of $1.5 billion in 2007 taxpayers have funded about $5 for every $1 of teacher contribution.

Page 44 – http://www.traf.mb.ca/images/stories/Annual_Reports/annual_report_2010.pdf

Bill Tufts

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