CANADA - Alberta schools and teachers' associations have agreed at the eleventh hour how to tackle a C$2.1bn (US$2.1bn) pension shortfall amassed before 1992.
Ed Stelmech, premier of Alberta, said it was an historic day: "School boards and the Alberta Teachers' Association are to be congratulated for meeting the 31 January timeline to resolve the longstanding teachers' pension issue."
As reported by Global Pensions in January, negotiators were concerned the remaining parties would not ratify the memorandum of understanding before the deadline at the end of the month.
The deal would see the 3.1% contribution to the shortfall removed from teachers' monthly salaries and the province taxpayers no longer held liable for the under funding.
Those involved cited the deal as the catalyst for a period of stability until 2012. Only at this date would pension fund contributions be eligible to be increased and should reflect requirements of a fully funded pension scheme.
Under this agreement, the Teachers' Pension Plan would be split into two funds after September 2009; relating to before and after 1992.
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