Alberta’s Local Authorities Pension Plan gains independence
BY Yaelle Gang | March 4, 2019
On March 1, 2019, Alberta’s Local Authorities Pension Plan gained independence from the government by becoming a jointly sponsored pension plan.
“The history of LAPP is that the Minister of Finance of the province of Alberta has historically been the trustee of the pension fund and the administrator of the plan, and this new legislation moves those responsibilities to this new LAPP corporation,” says Christopher Brown, president and chief executive officer of LAPP Corp.
Many attempts to gain independence, dating back to the early 1990s, never materialized, he adds. “It’s been a long time coming.”
LAPP will now run as a bicameral system of governance with a representative sponsor board and a fiduciary corporation board. “The biggest thing that it means is that the employers and employees who jointly contribute to LAPP and are financially responsible for it now have a direct say in the decision-making around the plan, in a way that they never did when the government was ultimately in control of it.”
When it comes to investments, LAPP will continue to use Alberta Investment Management Corp. as its investment manager.
“Now our boards can make decisions about how the plan will be structured and how our relationships with our key service providers — AIMCo and Alberta Pension Services — will operate,” says Brown. “We have new services contracts with both of them that were never with us before. They were always between those organizations and the minister. So we now have a direct responsibility as the fiduciary for the pension plan and then all the rights and obligations that go along with that.”
The LAPP plan has more than $45 billion in assets and is the seventh largest pension plan in Canada.