Judge declares voting rules of Local Authorities Pension Plan Board ‘of no force and effect’
The board of the Alberta Local Authorities Pension Plan Corp. acted improperly last year when it voted to change the rules governing operation of the LAPP Board, a Court of Queens Bench Justice has ruled.
As a result, "the decision of the ALAPP Board made on Nov. 15, 2007, that purported to modify quorum and majority requirements applicable to the LAPP Board is of no force and effect as it was not the decision of the LAPP Board," Madam Justice Mary Moreau wrote in her judgment, which was issued on Oct. 21.
The Labour Coalition of Pensions, the group of unions with members and former members enrolled in the LAPP that had sought judicial review of the changes, said the Board of the approximately $15-billion LAPP should now address its procedural issues in a way that respects previous agreements and the concerns of union members.
Madame Justice Moreau heard arguments Friday from lawyers for the Labour Coalition on Pensions, the LAPP Board and the government of Alberta.
At issue was an employer-dominated system of governance brought in over the opposition of union representatives on the LAPP Board at the ALAPP Board's 2007 meeting. While one board governs the pension plan and the other governs the corporation that administers it, they are made up of the same members.
Madame Justice Moreau's decision dismisses that change, and brings into question all decisions made by the LAPP Board since that date.
The coalition argued the rule change broke a long-standing agreement that required union approval for all significant changes to the policies or governance of the Plan - opening the door for decisions that are against the interests of working people.
The old rules, established when employers and unions bailed out the plan's unfunded liability in the early 1990's, required a two-thirds majority and a quorum of eight members of the board, which had to include four employer representatives and four employee representatives.
Under the rules declared by Madame Justice Moreau to be of no force and effect, only a simple majority was required and there did need not to be a single labour representative present.
The coalition of Alberta unions with members in the LAPP was concerned that those changes put at risk pension rights of LAPP members - including rights to early retirement, cost of living allowances and workers' ability to retire when their age and years of service add up to 85.
The coalition is made up of the Alberta Federation of Labour, the Alberta Union of Provincial Employees, the Amalgamated Transit Union, the Canadian Union of Public Employees, Health Sciences Association of Alberta and United Nurses of Alberta.
It represents approximately 125,000 members of the LAPP.
The Court of Queen's Bench case is called Alberta Federation of Labour et. al. Vs. Minister of Finance et. al.
Labour coalition warns of risks posed by pension changes, calls on plan members to call premier
A coalition of important Alberta unions says recent changes in the rules governing activities of the board of the Alberta Local Authorities Pension Plan put at risk early retirement, cost of living allowances and workers’ ability to retire when their age and years of service add up to 85.
The Labour Coalition on Pensions has purchased full-page advertisements in Alberta daily newspapers calling on members and pensioners to telephone their MLAs and Premier Ed Stelmach to overturn the changes.
The advertisements are scheduled to run in all Alberta daily newspapers today.
The coalition is made up of the Alberta Federation of Labour, the Alberta Colleges and Institutes Faculty Association, the Alberta Union of Provincial Employees, the Amalgamated Transit Union, the Canadian Union of Public Employees, Health Sciences Association of Alberta and United Nurses of Alberta.
On Dec. 19, the Coalition also commenced legal action to overturn the changes in governance rules for the LAPP Board. An originating notice of motion was filed in the Alberta Court of Queen’s Bench in Edmonton.
“While our legal action continues, we believe this is fundamentally a political problem that can be solved quickly by the Premier and cabinet,” the Coalition said today in a statement.
The changes put in place an employer-dominated system of governance that could allow the LAPP Board to reduce government and employer pension costs by cutting pension benefits, the Coalition said.
“We urge all public service pension plan members and retirees to contact the government about this, because we believe that the actions taken by the LAPP Board in December hurt the interests of our members in the LAPP and have serious implications for other pension plans as well,” the Coalition members said.
“Existing early retirement provisions, COLA provisions and the ’85 factor’ are all at risk because of this change,” the unions said.
“We believe that if this situation is not satisfactorily rectified, many members who now qualify for early retirement will want to retire while early retirement provisions are still in place, making the shortage of qualified employees even worse,” the statement said.
The Coalition represents approximately 125,000 members of the $15-billion LAPP.
The coalition objects to a change introduced suddenly at the LAPP Board’s Nov. 15, 2007, regular meeting that, if allowed to proceed, would break a long-standing agreement and deprive unions of a veto over decisions negatively affecting their members and retirees.
Under rules properly adopted in 1994, the 14-member LAPP Board required a two-thirds majority to pass a motion. In addition, under those rules, a quorum was defined as eight members of the board, including four employer representatives and four employee representatives.
The 1994 rules were based on an understanding among the Government of Alberta, employers and unions that stemmed from pension reforms in 1991 and 1992.
Through the understanding, employees agreed to help pay for the LAPP’s unfunded liability in return for an independent pension plan and joint governance, neither of which have been truly implemented. However, the rules governing the conduct of the board gave unions representing LAPP members a way to stop measures that would hurt their members or retirees.
Other properly constituted boards of Alberta agencies operate under rules similar to the old rules of the LAPP Board.
On Nov. 15, however, the LAPP Board adopted two changes based on an argument presented by their legal advisor. Under these changes, quorum would now be defined as 50 per cent of the members of the board and motions would be passed by a vote of 50 per cent plus one.
The unions dispute the arguments of the LAPP’s legal advisor and object to the new rules.
The changes were passed by the board using the new rules as interpreted by the LAPP’s lawyer.
The union action filed in December argues that the changes constitute a breach of the understanding stemming from the 1991-92 pension reforms and improperly take away the unions’ agreed-upon ability to protect their members’ interests.
In addition, the action argues that the board lawyer’s opinion is in error and that the action of the board, based on that opinion, is improper and must be overturned.
Union coalition takes legal action to overturn changes to governance of Alberta Local Authorities Pension Plan
A coalition of important Alberta unions and the Alberta Federation of Labour will commence legal action today to overturn recent changes in the rules governing activities of the board of the Alberta Local Authorities Pension Plan.
An originating notice of motion will be filed in the Alberta Court of Queen’s Bench by the AFL and the Alberta Union of Provincial Employees, Canadian Union of Public Employees, Health Sciences Association of Alberta and United Nurses of Alberta.
The unions are members of the Labour Coalition on Pensions, representing approximately 125,000 members of the LAPP, which at $15-billion is Alberta’s largest pension plan. The Amalgamated Transit Union and the Alberta Colleges and Institutes Faculties Association are also members of the coalition. AUPE is a part of the coalition but not a member of the AFL.
The coalition objects to a change introduced suddenly at the LAPP Board’s Nov. 15, 2007, regular meeting that, if allowed to proceed, would break a long-standing agreement and deprive unions of a veto over decisions negatively affecting their members and retirees.
“This is an extremely serious matter of grave concern to our members,” the coalition said in a joint statement.
Under rules properly adopted in 1994, the 14-member LAPP Board required a two-thirds majority to pass a motion. In addition, under those rules, a quorum was defined as eight members of the board, including four employer representatives and four employee representatives.
The 1994 rules were based on an understanding among the Government of Alberta, employers and unions that stemmed from pension reforms in 1991 and 1992.
Through the understanding, employees agreed to help pay for the LAPP’s unfunded liability in return for an independent pension plan and joint governance, neither of which have been truly implemented. However, the rules governing the conduct of the board gave unions representing LAPP members a way to stop measures that would hurt their members or retirees.
Other properly constituted boards of Alberta agencies operate under rules similar to the old rules of the LAPP Board.
On Nov. 15, however, the LAPP Board adopted two changes based on an argument presented by their legal advisor. Under these changes, quorum would now be defined as 50 per cent of the members of the board and motions would be passed by a vote of 50 per cent plus one.
The unions dispute the arguments of the LAPP’s legal advisor and object to the new rules.
The changes were passed by the board using the new rules as interpreted by the LAPP’s lawyer.
The union action being filed today argues that the changes constitute a breach of the understanding stemming from the 1991-92 pension reforms and improperly take away the unions’ agreed-upon ability to protect their members’ interests.
In addition, the action argues that the board lawyer’s opinion is in error and that the action of the board, based on that opinion, is improper and must be overturned.