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Alberta Teachers Retirement
Fund Board
financial statements
2010-2011 Education Annual Report
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Alberta Teachers Retirement Fund Board
Teachers Pension Plan and
Private School Teachers Pension Plan
Financial Statements
August 31, 2010
Alberta Teachers Retirement Fund Board
Teachers Pension Plan and
Private School Teachers Pension Plan
Financial Statements
August 31, 2010
Auditors Report
Statements of Net Assets Available for Benefits and Accrued Pension Benefits and Deficiency
Statements of Changes in Net Assets Available for Benefits
Statements of Changes in Accrued Pension Benefits
Notes to the Financial Statements
2010-2011 Education Annual Report
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ANNUAL RF POR1 - AUDI 1 OR' S RF POR1
1o the Alberta 1eachers' Retirement Fund Board
I have audited the Statements oF Net Assets Available For BeneFts and Accrued Pension BeneFts and DeFciency oF the
Alberta 1eachers' Retirement Fund Board as at August , and and the Statements oF Changes in Net Assets
Available For BeneFts and Changes in Accrued Pension BeneFts For the years then ended. 1hese Fnancial statements are
the responsibility oF the Board's management. My responsibility is to express an opinion on these Fnancial statements
based on my audits.
I conducted my audits in accordance with Canadian generally accepted auditing standards. 1hose standards require
that I plan and perForm an audit to obtain reasonable assurance whether the Fnancial statements are Free oF material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
Fnancial statements. An audit also includes assessing the accounting principles used and signiFcant estimates made
by management, as well as evaluating the overall Fnancial statement presentation.
In my opinion, these Fnancial statements present Fairly, in all material respects, the Net Assets Available For BeneFts and
Accrued Pension BeneFts and DeFciency oF the Board as at August , and and the Changes in Net Assets
Available For BeneFts and Changes in Accrued Pension BeneFts For the years then ended in accordance with Canadian
generally accepted accounting principles.
[Original signed by Merwan N. Saher|
CA
Auditor General
Fdmonton, Alberta
December
Auditor's

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3 3 F I NANCI AL S 1A1 F MF N1 S - 2 0 1 0 ANNUAL RF POR1
1he accompanying notes are part oF these Fnancial statements.
Approved by the Board
Greg Meeker Lowell Fpp
Chair vice Chair
$ 1housands 2010 2009
Assets
Cash S 3,674 S 1,351
Investments {Note 4) 5,502,748 3,757,560
Receivables {Note 5) 43,372 24,215
Loan Receivable From the Province {Note 6) 1,184,685
Capital assets {Note 7) 397 284
5,550,191 4,968,095
Llabl|ltles
Accounts payable {Note 8) 13,246 11,655
Net assets aval|ab|e For benehts 5,536,945 4,956,440

Actuarla| va|ue oF Accrued Penslon 8enehts (Note 12j 7,467,688 6,861,654
Dehclency $ 1,930,743 S 1,905,214
S1A1EMEN1S OF NE1 ASSE1S AvAILA8LE FOR 8ENEFI1S
AND ACCRUED PENSION 8ENEFI1S AND DEFICIENCY
AS A1 AUCUS1 31, 2010
Financial
S1A1EMEN1S
[Original signed by Greg Meeker]
[Original signed by Lowell Epp]
2010-2011 Education Annual Report
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3 4
$ 1housands 2010 2009
Increase in Net Assets
Investment earnings {losses) {Note 9) S 273,066 S {519,587)
Interest on Loan Receivable From the Province {Note 6) 1,233 76,087
274,299 {443,500)
Contributions {Note 10)
1eachers 263,777 234,586
Province oF Alberta 246,373 215,822
Fmployers 1,150 880
Past service purchases 5,649 4,884
1ransFers From other plans 7,917 11,711
524,866 467,883
1ota| increase in net assets 799,165 24,383
Decrease in Net Assets
Pension beneFts 173,029 152,976
1ermination beneFts 20,521 26,268
1ransFer to other plans 5,148 7,893
Administrative expenses {Note 11) 19,962 18,199
1ota| decrease in net assets 218,660 205,336
Change in Net Assets For the Year 580,505 {180,953)
Net Assets Avai|ab|e For 8enehts at 8eginning oF Year 4,956,440 5,137,393
Net Assets Avai|ab|e For 8enehts at End oF Year $ 5,536,945 S 4,956,440
$ 1housands 2010 2009

Accrued Pension 8enehts at 8eginning oF Year S 6,861,654 S 6,321,904
Increase (Decreasej in Accrued Pension 8enehts
Interest on accrued beneFts 487,101 465,248
BeneFts accrued 378,978 360,718
Changes in actuarial assumptions 10,616 131,023
Fxperience gains {85,530) {246,697)
BeneFts paid {185,131) {170,542)
606,034 539,750
Accrued Pension 8enehts at End oF Year $ 7,467,688 S 6,861,654
S1A1EMEN1S OF CHANCES IN NE1 ASSE1S AvAILA8LE FOR 8ENEFI1S
FOR 1HE YEAR ENDED AUCUS1 31, 2010
S1A1EMEN1S OF CHANCES IN ACCRUED PENSION 8ENEFI1S
FOR 1HE YEAR ENDED AUCUS1 31, 2010
2 0 1 0 ANNUAL RF POR1 - F I NANCI AL S 1A1 F MF N1 S
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NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S - ANNUAL RF POR1
NO1E
AU1HORI1Y AND NA1URE OF OPERA1IONS
aj Authorlty
1he Alberta 1eachers' Retirement Fund Board,
a corporation oF the Province oF Alberta
{the Province) operating under the authority oF the
Teacbers' Pens|on Plans /ct, Chapter 1-, RSA ,
is the trustee and administrator oF the 1eachers'
Pension Plan and the Private School 1eachers'
Pension Plan {the Plans). 1he Plans are Registered
Pension Plans as deFned in the |ncone Tas /ct and
are not subject to income taxes. 1he income tax
registration number is .
bj Ob|lgatlons re|atlng to the Pre-September Perlod
1he 1eachers' Pension Plan assets and obligations
related to pensionable service since August ,
{the Post-August period) have been accounted
For separately From the assets and obligations related
to pensionable service prior to September ,
{the Pre-September period) and, accordingly,
these Fnancial statements and notes include only
Post-August transactions oF the 1eachers'
Pension Plan and transactions oF the Private School
1eachers' Pension Plan.
FFFective September , , the Province assumed
Full responsibility For obligations related to
Pre-September period pensionable service
and provides the required amounts to pay the
obligations on a monthly basis.
NO1E
DESCRIP1ION OF 1HE PENSION PLANS
1he Following description oF the Plans is a summary only.
aj Cenera|
1he Plans are contributory deFned-beneFt pension
plans For the teachers oF Alberta.
bj Fundlng
1he determination oF the value oF the beneFts and
the required contributions For the Plans is made on
the basis oF periodic actuarial valuations.
All teachers under contract with school jurisdictions
and charter schools in Alberta are required to contribute
to the 1eachers' Pension Plan. Current service costs
and related deFciencies are Funded by equal
contributions From the Province and the teachers.
An additional percent cost-oF-living adjustment
For service earned aFter , as described
in Note {h), is Funded entirely by the teachers.
Certain public colleges and other designated
organizations in Alberta also participate in the
1eachers' Pension Plan under the same Funding
arrangements, except these organizations make
the employer contributions rather than the Province.
Certain private schools participate in the Private
School 1eachers' Pension Plan. Plan costs are Funded
by contributions From the employers and the teachers.
cj Retlrement Penslons
Retirement pensions are based on the number oF years
oF pensionable service and the highest consecutive Fve-
year average salary. Pensions are payable to teachers
who retire aFter completion oF at least Fve years oF
Notes to the Financial
S1A1EMEN1S
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pensionable service, with certain restrictions, and who
have attained age . Unreduced pensions are also
payable to teachers who have reached at least age
and the sum oF their age and service equals . vith
certain restrictions, reduced early retirement pensions
are payable to teachers who retire on or aFter age
with a minimum oF Fve years oF pensionable service.
dj Disabi|ity 8enehts
1eachers who are disabled aFter August ,
are credited with pensionable service while disabled.
1eachers do not contribute to the Plans while disabled.
ej 1ermination 8enehts
ReFunds or commuted value transFers are available
when a teacher ceases employment.
Fj Death 8enehts
Death beneFts are available upon the death oF a
teacher and may be available upon the death oF
a pensioner. 1he beneFt may take the Form oF a
lump sum payment or a survivor pension.
gj Other Provisions
Purchase oF past service and reinstatement oF reFunded
service is allowed on a basis that is cost neutral to the Plans.
hj Cost-oF-Living Ad[ustments
Pensions payable are increased each year by an
amount equal to percent oF the increase in the
Alberta Consumer Price Index. 1he portion oF
pension earned aFter is increased by an
additional percent oF the increase in the
Alberta Consumer Price Index.
NO1E
SUMMARY OF SICNIFICAN1 ACCOUN1INC
POLICIES AND REPOR1INC PRAC1ICES
aj 8asis oF Presentation
1he Fnancial statements are prepared on a
going-concern basis in accordance with Canadian
generally accepted accounting principles and
present the aggregate Fnancial position oF the Plans.
1he statements disclose the net assets available
to meet Future beneFt payments, and are prepared
to assist participants and others in reviewing the
activities oF the Plans For the Fscal year.
bj Investments
Investments are recorded as oF the trade date and are
stated at Fair value. 1he methods used to determine year-
end Fair value are explained in the Following paragraphs.
- Money-market securities are recorded at cost which
approximates Fair value.
- 1he Fair value oF publicly traded securities is based
on market prices quoted by independent suppliers
oF securities related data.
- 1he Fair value oF non-publicly traded equity
investments reFects cash outlays adjusted by periodic
third party valuations and Fees charged by general
partners.
- 1he Fair value oF real estate and oil and gas properties
not publicly traded is based on estimates as
determined by management in conjunction with
industry specialists.
Premiums and discounts arising on acquisitions are
amortized using the eFFective interest rate method
and included in investment earnings. Changes in
Fair value subsequent to acquisition are included
in investment earnings {Note ).
ANNUAL RF POR1 - NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S
2010-2011 Education Annual Report
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NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S - ANNUAL RF POR1
gj Measurement Uncertainty
1he preparation oF Fnancial statements, in conFormity
with Canadian generally accepted accounting
principles, requires management to make estimates
and assumptions that aFFect the amounts reported in
the Fnancial statements. Actual results could diFFer
From these estimates.
Measurement uncertainty exists in the calculation
oF the Plans' actuarial value oF accrued beneFts.
Uncertainty arises because the Plans' actual
experience may diFFer signiFcantly From assumptions
used in the calculation oF the Plans' accrued beneFts.
Measurement uncertainty exists in the valuation oF
the Plans' private investments as values may diFFer
signiFcantly From the values that would have been
used had a ready market existed For these investments.
hj Future Accounting Requirements
1he Canadian Accounting Standards Board {AcSB)
has conFrmed that Section Pension Plans will
replace the existing Section Pension Plans
on }anuary , . 1he Plans will adopt these new
standards For the Fscal year ending August , ,
including comparative Fgures. 1he adoption oF Section
Pension Plans will result in additional disclosures
but will not have a signiFcant impact on the Plans'
Fnancial position or operations.
cj Foreign Exchange
Foreign currency transactions are translated into
Canadian dollars at rates oF exchange prevailing
at the dates oF the transactions. At year-end, the
Fair value oF investments and any other assets and
liabilities denominated in a Foreign currency are
translated at the year-end exchange rate. Gains or
losses resulting From exchange diFFerences are included
in the determination oF the change in Fair value oF
investments.
dj Derivative Financia| Instruments
Derivative Fnancial instruments are valued based
on quoted market prices. Gains or losses on these
instruments are recognized with changes in market
value, and are included in the determination oF current
year change in Fair value oF investments.
ej Capita| Assets
Capital assets are recorded at cost and amortized
over their estimated useFul lives. Amortization is
calculated using the straight-line method at the
Following annual rates:
Furniture and equipment -%
Computer hardware and soFtware -.%
SoFtware under development is not amortized
until implemented.
F j Compensation
Details oF senior staFF compensation and Board
member remuneration included in Salaries
and beneFts {Note ) are presented in the
Compensation and Discussion Analysis section
oF the Annual Report.
2010-2011 Education Annual Report
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3 8 2 0 1 0 ANNUAL RF POR1 - NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S
aj Derivative Contracts
Derivative contracts are Fnancial contracts, the value oF which is derived From the value oF underlying assets,
indices, interest rates or currency rates.
- Foreign currency Forwards are contractual obligations either to buy or sell speciFed amounts oF Foreign
currencies at predetermined Future dates and exchange rates,
- Credit deFault swaps allow counterparties to buy and sell protection on credit risk inherent in a bond,
- Interest rate swaps allow parties to exchange Fxed and Foating interest rate cash Fows based on notional amounts, and,
- Futures contracts are agreements to receive or pay cash on settlement dates based on changes in the levels oF
speciFed indices.
1he maturities, notional amounts and the net Fair values oF the Plans' derivative contracts are as Follows:
$ 1housands 2009
Fair value Cost Fair value Cost
Fixed Income and Cash
Cash S 34,197 S 34,197 S 47,276 S 47,276
Money-market securities 155,856 155,856 110,981 110,981
Bonds and debentures 1,805,110 1,708,117 597,921 568,223
1,995,163 1,898,170 756,178 726,480
Fquities
Publicly traded equities
Canadian 1,156,825 1,003,740 1,016,244 958,120
Global 2,141,958 2,265,390 1,857,460 1,899,497
Non-publicity traded equities 208,802 222,145 127,678 157,339
3,507,585 3,491,275 3,001,382 3,014,956
S 5,502,748 S 5,389,445 S 3,757,560 S 3,741,436
NO1E
INvES1MEN1S
Foreign currency Forwards
Credit deFault swaps
Interest rate swaps
Fixed income Futures
2009
1erms oF Maturity {%) S 1housands S 1housands

vithin 1 to 3 Over Notional Net Fair Notional Net Fair
1 ear ears 3 ears Amount value Amount value

100 2,099,149 {1,355) 1,060,685 3,614
61 39 3,252 {1,935) 14,104 {391)
27 73 60,026 {4,398) 56,686 3,028
100 25,227 16,402 21,604 272
2010-2011 Education Annual Report
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3 9 NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S - 2 0 1 0 ANNUAL RF POR1
cj Credit Risk
Credit risk arises From the possibility that a loss may occur From the Failure oF another party to perForm according to
the terms oF a contract.
1he Plans limit their credit risk by dealing with counterparties that are considered to be oF high quality, setting
and monitoring compliance with portFolio guidelines, diversiFcation and obtaining collateral where appropriate.
1he Plans record all investments at Fair value. Consequently, investment values reFected in Note 4 oF these Fnancial
statements represent the maximum credit risk exposure oF the Plans as at August 31, 2010.
dj Currency Risk
Currency risk arises From the Plans' holding oF investments that are denominated in Foreign currencies.
Currency exposure may be managed using derivative contracts, primarily currency Forwards. 1he Plans' Foreign
currency exposure is as Follows:
bj Interest Rate Risk
Interest rate risk relates to the impact oF interest rate changes on the Plans' cash Fows and Fnancial position.
1his risk arises From diFFerences in the timing and amount oF cash Fows related to the Plans' assets and liabilities.
As at August 31, 2010, a 1% increase in nominal interest rates would result in a decline in the Fair value oF Fixed
Income investments oF 7.6 % {2009: 7.0%).
Based on Fair values at August 31, 2010, Fixed Income investments have the Following average eFFective yields
and term structures:
$ 1housands



United States
Furo
United Iingdom
}apan
Switzerland
Hong Iong
Other

Net Foreign
Currency
Fxposure
S 1,134,150
247,015
189,087
176,921
131,350
63,977
223,362
S 2,165,862

Net Foreign
Currency
Fxposure
S 926,913
291,209
178,036
162,785
83,467
43,755
209,524
S 1,895,689


Currency
Derivatives
S {170,883)
{81,790)
{42,101)
56,568
14,448

94,816
S {128,942)

Foreign
Currency
Fxposure
S 1,305,033
328,805
231,188
120,353
116,902
63,977
128,546
S 2,294,804
2009
2009
S 1housands S 1housands

1erms oF Maturity

Average Average
vithin 1 to 5 Over FFFective FFFective
1 ear ears 5 ears 1otal ield 1otal ield
155,856 155,856 0.79% 110,981 0.28%
69,923 566,116 1,169,071 1,805,110 4.12% 597,921 5.17%
Money-market securities
Bonds and debentures
2010-2011 Education Annual Report
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4 0 2 0 1 0 ANNUAL RF POR1 - NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S
$ 1housands 2009
Accrued income S 22,852 S 9,140
Contributions - teachers 11,324 11,166
Contributions receivable From the Province 8,981 3,733
Other 215 176
S 43,372 S 24,215
NO1E
RECEIvA8LES
$ 1housands 2009
Opening balance S 1,184,685 S 944,099
Contributions relating to Pre-September 1992 period {243,949)
BeneFt payments relating to Pre-September 1992 period 408,448
Interest on Loan Receivable From the Province 1,233 76,087
Payment received From the Province {1,185,918)
S S 1,184,685
NO1E
LOAN RECEIvA8LE FROM 1HE PROvINCE
2009
Accumulated
Cost Amortization Net Net
S 507 S 277 S 230 S 46
4,120 3,953 167 238
S 4,627 S 4,230 S 397 S 284
$ 1housands



Furniture and equipment
Computer hardware and soFtware
NO1E
CAPI1AL ASSE1S
NO1E
ACCOUN1S PAYA8LE
$ 1housands 2009
1ax withholdings S 7,050 S 6,583
Investment transactions 2,300 2,770
Supplementary Fmployee Pension Plan 966 823
Other 2,930 1,479
S 13,246 S 11,655
During the year S414 million was received From the Province and was distributed as beneFt payments relating to
the Pre-September 1992 period.
2010-2011 Education Annual Report
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4 1 NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S - 2 0 1 0 ANNUAL RF POR1
$ 1housands 2009
1eachers
Current service S 194,915 S 181,929
Current service additional 10% COLA 12,776 11,835
DeFciency 56,086 40,822
263,777 234,586
1he Province
Current service 193,677 178,001
DeFciency 52,696 37,821
246,373 215,822
Fmployers
Current service 1,136 869
DeFciency 14 11
1,150 880
Past service purchases 5,649 4,884
1ransFers From other plans 7,917 11,711
S 524,866 S 467,883
Investment management
Salaries and beneFts
Custodial and banking
Fxternal proFessional services
Communications
Premises and equipment
Board and Investment Committee
Audit
Other
$ 1housands
NO1E
ADMINIS1RA1IvE EXPENSES
NO1E
CON1RI8U1IONS
NO1E
INvES1MEN1 EARNINCS](LOSSESj
$ 1housands 2009
Interest and dividend income
Cash and money-market securities S 1,844 S 3,335
Bonds and debentures 51,514 26,216
Publicly traded equities
Canadian 27,078 40,969
Global 42,794 46,822
Non-publicly traded equities 214 859
123,444 118,201
Realized net gain {loss) on disposal oF investments 52,441 {486,306)
Unrealized net gain {loss) on investments 97,181 {151,482)
S 273,066 S {519,587)

Actual

S 9,976
4,481
992
1,330
601
604
116
78
21
S 18,199

Budget
S 14,894
5,087
1,126
1,124
761
638
152
70
62
S 23,914

Actual
S 11,495
5,024
1,078
904
622
524
160
75
80
S 19,962
2009
2010-2011 Education Annual Report
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O
N

A
L
B
E
R
T
A

T
E
A
C
H
E
R
S

R
E
T
I
R
E
M
E
N
T

F
U
N
D

B
O
A
R
D

4 2 2 0 1 0 ANNUAL RF POR1 - NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S
NO1E
O8LICA1IONS FOR 8ENEFI1S
aj va|uations and Assumptions
Best-estimate valuations oF the 1eachers' Pension Plan For the Post-August 1992 period and the Private School
1eachers' Pension Plan were done as at August 31, 2010. valuations For the Plans were also prepared as at August 31,
2009. 1he present value oF accrued beneFts was determined using the projected beneFt method prorated on service.
1he assumptions used in the valuations are based on management's best estimate oF Future events.
1he major long-term economic assumptions used in the best-estimate valuations are:
Future experience will diFFer From those assumptions. Any diFFerences between the assumptions and Future
experience will emerge as gains or losses in Future best-estimate valuations.
bj Sensitivity oF Changes in Ma[or Assumptions
1he table below shows the impact oF changes to major assumptions, holding all other assumptions constant:
1eachers' Pension P|an Private Schoo| 1eachers' Pension P|an
0.50% decrease in 0.50% increase 0.50% decrease in 0.50% increase
Rate oF Return on in Rate oF Rate oF Return on in Rate oF
Invested Assets InFation Invested Assets InFation
1.52% 1.22% 1.89% 1.39%
S627 million S433 million S3 million S2 million
Increase in current service costs
{% oF total teacher salaries)
Increase in accrued pension beneFts
1he current service cost {excluding 0.2% For administrative expenses) as a per cent oF total teacher salaries For
the 1eachers' Pension Plan was 13.66% and For the Private School 1eachers' Pension Plan was 14.71%.
2009
Rate oF return on invested assets 7.00% 7.00%
Rate oF Alberta inFation 2.75% 2.75%
Real wage increases 1.00% 1.00%
2010-2011 Education Annual Report
236
O
T
H
E
R

I
N
F
O
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M
A
T
I
O
N

A
L
B
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T
A

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E
N
T

F
U
N
D

B
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4 3
Benchmark returns are weighted averages oF certain market index returns based on the policy asset mix oF each Plan.
NO1E
8UDCE1 INFORMA1ION
1he accrued pension beneFts are based on management's best estimates oF Future events aFter consultation with
the Plans' actuary. DiFFerences between actual results and management's expectations are disclosed as net experience
gains in the statement oF changes in accrued pension beneFts. Accordingly, a budget is not included in these Fnancial
statements, with the exception oF administrative expenses {Note 11).
NO1E
INvES1MEN1 RE1URNS AND RELA1ED 8ENCHMARk RE1URNS
Investment returns and related benchmark returns by Plan For the years ended August 31 are as Follows:
P|an

1eachers' Pension Plan Post-August 1992 period
Private School 1eachers' Pension Plan
2009
Investment Benchmark Investment Benchmark
Return Return Return Return
5.6% 5.4% -8.5% -6.8%
6.9% 6.4% -12.7% -10.7%
$ 1housands



Net assets at
beginning oF year
Net contributions
BeneFts
Investment earnings ]{losses)
Interest on Loan
Receivable From Province
Administrative expenses
Net Assets
Actuarial value oF
accrued pension beneFts
DeFciency

1eachers'
Pension Plan
1eachers'
Pension Plan
Private
1eachers'
Private
1eachers'

1otal

1otal
2009
S 4,929,596

497,170
{171,674)
271,587
1,233
{19,854)
5,508,058


{7,432,452)
S
{1,924,394)
S 5,106,622

432,278
{151,647)
{515,674)
76,087
{18,070)
4,929,596


{6,829,453)
S {1,899,857)
26,844

2,027
{1,355)
1,479

108)
28,887


35,236

6,349
S 30,771

1,444
{1,329)
{3,913)

{129)
26,844


{32,201)
S {5,357)
S 4,956,440

499,197
{173,029)
273,066
1,233
{19,962)
5,536,945


{7,467,688)
S
{1,930,743)
S 5,137,393

433,722
{152,976)
{519,587)
76,087
{18,199)
4,956,440


{6,861,654)
S {1,905,214)
NO1 F S 1 O 1 HF F I NANCI AL S 1A1 F MF N1 S - 2 0 1 0 ANNUAL RF POR1
cj Resu|ts 8ased on va|uations
1he valuation For the Post-August 1992 period oF the 1eachers' Pension Plan as at August 31, 2010 determined a
deFciency oF S1.924 billion. 1he valuation For the Private School 1eachers' Pension Plan to August 31, 2010 determined
a deFciency oF S6.349 million.