July 17th, 2024

Letter: Alberta Pension Plan is a good idea and needs more support

By Letter to the Editor on June 26, 2024.

Dear editor,

The Alberta Pension Plan 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formula for determining the amount owing to any province (in this case, Alberta) based on the amounts paid into it and withdrawn.

Since Albertans consistently pay more into the plan than need the payout, there is a huge amount owing to Alberta. Currently, Albertans send Ottawa $9 billion each year from our working population and receive $6 billion for our seniors.

This difference goes into the CPP Investment Board (which is different from the CPP).

There are $600 billion-plus 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.

(Editor’s note: For context, Lifeworks is no longer a company and was purchased by Telus, then merged into Telus Health.)

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% 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 certain 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 it 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 than the intake of funds), it is in Alberta’s interests to explore its own pension plan.

Please take the time to research the benefits.

Marg VanderSpruit

Medicine Hat

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