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July 22, 2024 July 22, 2024

Alberta needs to ditch the CPP

Posted on July 5, 2024 by Vauxhall Advance

Dear Editor:
The Alberta Pension Plan (APP) is good for Albertans! It is constitutionally guaranteed that a province may withdraw from the Canadian Pension Plan and there is a formula for determining the amount owing to any province (in this case, Alberta) based on the paid into it and withdrawn.
Since Alberta consistently pays more into the plan than is paid out, there is a huge amount owing to Alberta.
Currently, Albertans send Ottawa $9 billion each year from our working population and receive $6 billion back for our seniors.
This difference goes into the CPP Investment Board (which is different from the CPP). There are $600 plus
billion in the CPP Investment Board Fund. Lifeworks (formerly Morneau Shepell) is the company hired by the AB government to determine what Albertans are entitled to. According to the formula, based on investments and interest, Lifeworks came up with a figure of $360 billion. The federal government is supposed to be trying to determine what they think Alberta should receive. However, it seems they are putting off this easily calculated number as long as possible. This fund is creating returns of 9.2 per cent over 10 years, BUT THIS INCREASE DOES NOT GO TO THOSE RECEIVING BENEFITS. I am wondering if the federal government influences the way in which this fund is invested by suggesting DEI (diversity, equity and inclusion) and climate change projects get preference? The fund has been under
scrutiny for investing in funds in China which allegedly persecute Uyghurs.
Finally, the fund management fee is higher than many other worldwide pension plans.
Even if Alberta does not get any money from this fund (which they should), the APP is still a good deal for Albertans. Because of our young hard-working population, who work longer than in other provinces, we would be able to either increase seniors’ benefits OR decrease premiums for those paying
into the APP.
An Alberta Pension Plan MUST, under the legislation, pay out the same, or GREATER benefits, than the CPP. Nothing would change for those receiving CPP benefits currently. The key to having a great APP is a
hands-off policy from the government.
It must be administered independently by proven fund managers, to gain the greatest returns possible.
Since the CPP is not viable after 2026 (when the payouts will be larger that the intake of funds), it is in Alberta’s interests to explore their own pension plan.
Please take the time to research the benefits!
Marg VanderSpruit
Medicine Hat

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