In the year 2000, 189 active female teachers retired. Their average age was 57.7 years and their average service was 26.6 years. Their life expectancy at this age is 86. This means that these teachers, on average, will receive a pension from TRAF for 28.4 years. These teachers will receive a pension for a longer period of time than they earned salaries as teachers. Need more be said about the importance of your pension. For male teachers, comparable figures are 226 retirees of average age 57 years with average experience of 30.8 years. With a life expectancy of 81 for males of this age, these teachers on average, will receive their pension for 24 years.

Recognizing the importance of your pension for a period of 20 to 30 years after your retirement, let's consider the number on problem with our pension plan.

Our pension plan provides for an annual pension adjustment for increase or increase to a maximum of the percentage increase in the consumer price index for Canada for the previous calendar year. This increase is usually referred to as the Cost of Living Adjustment (COLA) and is effective July 1 of every year. This adjustment is funded by the Pension Adjustment Account (PAA). Currently, 16.5% of your TRAF contributions go into the PAA as do earning on the investments earned by the fund at a rate equal to the earning on the fixed income investments such as bonds and mortgages. However, the PAA can only pay a COLA if it has enough funds to do so without producing an unfunded liability in the PAA.

If the fund is not large enough to pay an increase equal to the CPI then the COLA increase is either at a lower rate or in a worst case there is no increase. There have been 11 times in the past 23 years when the the PAA has not been able to to provide for an increase equal to the CPI. In July 2000, the PAA could not support any increase and special negotiations between the MTS and the Manitoba Government had to be held to arrive at a 2% increase for 2000.

Our pension plan must be improved to ensure a full COLA each and every year. To not do so will mean that teacher pensions will lose real value over time. For example, consider what would happen if for the next 24 years the CPI increased 3% per year, but the PAA could only provide for a 2% COLA for each of these years. After 24 years, what you could buy for $100.00 when you retired would now cost $203.28, but your pension would only have increased to $160.84. A pension would have lost 26.4% of its purchasing power over this period of time

Some other inadequacies in our pension plan are:

1. All costs of administering the pension plan are paid for from teacher funds. The Government of Manitoba does not contribute to the costs. This is certainly not the norm in pension  plans.

2. The Board that administers TRAF is composed of 7 members. Three (3) are appointed from persons whose names are submitted to the Government by the MTS. Thus, although the funds managed by TRAF are teachers' contributions, the teachers representatives have less than 50% representation on the Board. This is also not the norm in pension plans.

3. There is no method of resolving disputes when the MTS seeks improvements to the pension plan on behalf of teachers. The Government can just say no. There is no mandated conciliation or binding arbitration process to resolve these issues. this is not the norm but occurs because our pensions are covered by legislation. Most pensions are negotiated by employees with their employees.

These are some of the most serious weaknesses in our pension plan. We need to resolve them now.

The TRAF Board has a proposal before the MTS and the Government of Manitoba for a much improved system of governance with a method for dispute resolution. The MTS supports the proposal and the Manitoba Government has committed itself to examine this proposal and other alternatives. With a Government noted for its caring attitude towards workers and its ideology based on fairness and social justice, perhaps teachers will obtain the necessary improvements.

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