Eamonn O'Sullivan

As governments across Canada examine changes to pensions and retirement savings, one Cochrane man is already feeling the need for reform and claims government legislation lowered his pension by $50,000.

Eamonn O’Sullivan, a GlenEagles resident, retired from teaching in 1993 at age 60.

As a member of the Alberta Teachers’ Retirement Fund (ATRF), O’Sullivan said he was promised a pension of two per cent for each year of service, based on an average of the highest five years of salary.

His 34 years of service should have equalled 68 per cent of his working income, he said.

But when he got his first pension cheque 17 years ago, “I remember thinking it was more like 55 per cent, (but) I didn’t dwell on it.”

It was years before he discovered the Alberta Society for Pension Reform, a group that alleges the provincial government has shortchanged thousands of public employees like O’Sullivan on their pensions for decades.

“We’re not getting the pensions we were promised,” said Ken Smith, president of the group, which represents members of the ATRF, the Public Service Pension Plan (PSPP) and the Local Authorities Pension Plan (LAPP).

He said in the 1990s, the province was short on cash and used retirement savings as general revenue and for debt reduction, subsequently offering members of ATRF, PSPP and LAPP an advance on the benefits of either the Canada Pension Plan, Old Age Security (OAS), or both.

Many members took that loan, including O’Sullivan, who received a $14,000 advance on his OAS between the ages of 60 and 65.
He is still paying down the principle, with interest, at a current rate of about $163 per month.

Local resident Eamonn O'Sullivan, a member of the Alberta Society for Pension Reform, says government changes to his teachers’ pension in the ’90s have cost him more than $50,000 since he retired in 1993. Photo by Alan Mattson

“Unbeknownst to us, (the Alberta government) reduced that advance so that it no longer equalled a two per cent pension,” Smith said. “They’ve reneged on their promise.”

O’Sullivan said he is only receiving 1.6 per cent of his salary average per year of work, instead of the two per cent he was promised.
Over the course of 17 years of retirement, he calculated it has cost him more than $50,000.

“People who retired in the ’80s got better pensions than this,” Smith said. “If we retired in the ’90s — after the government was short of cash — we’re not getting the pensions we were supposed to get.”

O’Sullivan said “it hasn’t had dire consequences,” due to his savings, taking on part-time jobs, and his wife’s successful music career.
But Smith said others that relied on the government pensions have been devastated financially.

“Today, many plan members, after contributing to our Alberta Government pension plans for 25, 30 and 35 years are now relying on low-income subsidies in order to survive,” reads a society press release.

The society filed a class-action lawsuit against the Alberta government several years ago, but had to drop the claim because they lacked legal funding. Currently, Smith said the society is trying to raise funds and find a law firm willing to file a new claim on a contingent basis.

“We’re still wishing to get into court, but in the meantime we want to put some pressure on the government.”

Jason Maloney, a spokesperson for Alberta Finance and Enterprise, said the government will take the society’s claims “seriously,” but added the government “doesn’t set the rules around  the members’ pensions should be.”

“That’s more developed with the actual pension plan boards. We’re not too sure where (Smith) is getting some of his information from.”
For more information on the society, visit albertapensionreform.ca.

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