Teachers are now taking home more of their paycheck thanks to lower pension contribution rates. Both the Teachers’ Pension Plan (TPP) and the Private School Teachers’ Pension Plan (PSTPP) saw reductions in contribution rates effective Sept. 1. What does this mean for Alberta teachers? Read on.
How much will the contribution rates be reduced?
As of Sept. 1, 2024, contributions were reduced by a total of 2 per cent of pay for the TPP, shared between the members and government/employers, and a total of 1 per cent of pay for the PSTPP, shared between the members and employers.
For the TPP, the total contribution rate will decrease from 10.32 per cent to 9.29 per cent. For the PSTPP, it will change from 9.95 per cent to 9.45 per cent. This is the breakdown is shown in the table below.
What factors influence these contribution rate changes?
The Alberta Teachers’ Retirement Fund (ATRF) Board carefully reviews various factors, the key one being the actuarial valuation. This study assesses the plan’s liabilities against its assets to ensure the pension fund is adequately funded.
Why is this reduction happening now?
The elimination of the deficit that had long plagued the fund and the strong plan-funded status, along with the robust and effective risk-management levers in place, allowed the ATRF Board to reduce contribution rates this year.
How do the new rates affect my monthly contributions?
If you earn $8,000 per month, your monthly contribution is (as of Sept. 1) $739.87. This is calculated as $470.37 on the first $5,708.33 at an 8.24 per cent rate and $269.50 on the remaining amount at an 11.76 per cent rate. Prior to the reduction, your monthly contribution would have been $808.46 with the same monthly earnings. This decrease in contributions means more disposable income for you!
What if I work part-time?
If you work part-time, your contributions are based on what you would have earned working full-time in your position and then adjusted by your FTE.
What is the importance of these changes for teachers?
These reductions not only enhance financial flexibility for teachers but also demonstrate the effective management of the ATRF’s pension funds. They represent a positive step toward a more secure retirement for all teachers.
Where can I find more information about these changes?
For more details, you can visit the ATRF website (Contribution Rates – Alberta Teachers’ Retirement Fund (ATRF).
| Current contribution rate details | TPP (pre Sept. 1) | TPP (post Sept. 1) | PSTPP (pre Sept. 1) | PSTPP (post Sept. 1) |
|---|---|---|---|---|
| Up to YMPE | 9.00% | 8.24% | 8.50% | 8.25% |
| Above YMPE | 12.86% | 11.76% | 12.15% | 11.79% |
| Total teachers’ contribution | 10.32% | 9.29% | 9.95% | 9.45% |
| Total government/employer contribution | 9.89% | 8.92% | 9.51% | 9.01% |
