News about pensions

Do Albertans want to withdraw from the Canada Pension Plan?

“People did not buy it, and the Alberta Pension Plan remains extremely unpopular among Albertans.”

The UCP government has been exploring the idea of withdrawing from the Canada Pension Plan (CPP) in favour of a provincial pension plan, but the proposal has faced vocal pushback.

On Sept. 21, 2023, the Alberta government released a third-party report exploring the possibility of setting up a potential Alberta Pension Plan.

“Albertans pay too much into CPP for the benefits they receive,” according to the Alberta Pension Plan website.

“The report estimates that Albertans could save over $5 billion in the first year alone by moving from the CPP to an APP. That money could be used to increase pension benefits for Alberta seniors and paycheques for workers. This could also mean a reduction in costs for Alberta businesses.”

The boost to pension benefits could include a significant increase to each senior’s monthly pension payment, or even a $5,000 to $10,000 bonus payment at retirement, the website added.

Last fall, the UCP’s Alberta Pension Plan Engagement Panel hosted a series of telephone town hall for Albertans to discuss the proposal.

“During the first phase of our engagement on a potential provincial pension plan, we heard loud and clear that Albertans want more information on the value of the asset transfer Alberta would be entitled to if we were to withdraw from the Canada Pension Plan,” said Finance Minister Nate Horner in February.

Horner added how Canada’s chief actuary will give a federal estimate of Alberta’s share of the pension plan this fall.

The Alberta Pension Protection Act, passed last fall, makes it so a referendum will be required before Alberta can pull out of the national pension plan.

However, the government rejected an amendment by the NDP that would have compelled it to respect the results of referendum.

Shannon Phillips, Lethbridge-West MLA and NDP critic for finance (insurance and pensions), told the Fitzhugh in an interview that the UCP’s report had been widely discredited by every available economist, expert, observer and general public.

She added how the government spent $10 million pushing the supposed benefits of a provincial pension plan.

“People did not buy it, and the Alberta Pension Plan remains extremely unpopular among Albertans,” Phillips said.

“What the government did was they acknowledged that that initial report was garbage. They have since tried to distance themselves from it and instead what they’re saying is, ‘Oh, no, no, no. Now we’re going to ask the federal government for how much Alberta is owed, and then we’ll take that to referendums.’ So, this is going to be a longer process in which the government continues to withhold information from Albertans, to manipulate information that is given to Albertans.”

A poll conducted by Viewpoint Alberta and shared with CBC News showed that 57 per cent of respondents opposed the adoption of a provincial pension plan.

Only 22 per cent were in support, and 20 per cent were neutral.

The Alberta NDP has also hosted dozens of townhalls across the province, with the response overwhelmingly against withdrawing from the CPP.

Phillips said a major concern was the idea of “rolling the dice” on the money that comes off people’s paycheques and employers contribute, rather than sticking with the CPP, which has been a stable, well-diversified fund for over 60 years.

“Instead of that status quo, what Albertans are being asked to do is give their money to Danielle Smith to make politically motivated investments with and gamble with,” she added.

“That is the basic question facing Albertans, and that is what has them so concerned.”

Other concerns include affordability and escalating premiums.

“I do not believe that Albertans’ retirement savings belong to any politician,” Phillips said.

“They do not belong to Danielle Smith. They do not belong to Justin Trudeau. They do not belong to Rachel Notley. It is their money, and that is why the CPP is one of the pillars of Canadians retirement security. It is the envy of the world that is insulated from political interference, and that consistently post the best investment performance of any pension fund in the world.

“So, this is truly a system that is not broke, but Danielle Smith thinks she can get her hands on it, she will be able to fix it, who will that benefit? It will benefit her friends. It will benefit her personally. It will not benefit people who are trying to plan their retirement here in Alberta.”

Source: https://www.fitzhugh.ca/golden-years/do-albertans-want-to-withdraw-from-the-canada-pension-plan-8648687

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