Would the Alberta Pension Plan (APP) benefit you? The premier says so, but others aren’t so sure.
The Alberta government recently released a report that outlines the opportunities and risks of Alberta withdrawing from the Canada Pension Plan (CPP) to start a provincial plan.
“This report shows a made-in-Alberta pension plan could put more money in the pockets of hard-working families and business owners and improve retirement security for seniors,” said Premier Danielle Smith in the press release.
The messaging emphasizes the positives for Albertans: more stability, larger pension benefits for seniors, bigger paycheques, savings for businesses, portability and Alberta-centric gains. These possibilities, however, are rooted in estimates and assumptions that are being questioned.
Critics suggest that these estimates and benefits are built on a faulty premise — namely, that Alberta would be entitled to a $334 billion asset transfer from the CPP in 2027. The calculation is an interpretation of what Alberta is owed given Albertans’ contributions, which have historically exceeded the pension benefits paid to Albertans. At the same time, this amount represents more than half of the CPP’s current value, leaving some to question the math.
“Claiming that Alberta can withdraw over half of the CPP fund is laughable,” said Brad Lafortune, executive director of Public Interest Alberta, in a statement. “This politically motivated report is classic ‘decision-based evidence-making.’”
The report, as well as messaging from the provincial government, clearly states that the APP would provide benefits comparable to the CPP. In fact, it would be obligated to under the CPP Act. However, whether an APP would put more money in Albertans’ pockets remains to be seen.
“There are too many questions, too many unknowns,” said ATA president Jason Schilling, “If this was an assignment, I’d hand it back to the student to fill in the gaps.”
How would an APP affect teachers?
Pensions have been a heated topic for teachers in recent years, particularly following the 2019 passage of Bill 22, Reform of Agencies, Boards and Commissions and Government Enterprises Act, which handed over responsibility for investment management of public sector pensions — including the Teachers’ Pension Plan (TPP) — to Crown corporation Alberta Investment Management Corporation (AIMCo). That move was made without consulting teachers.
“Trust is a factor,” said Schilling. “Does the government have our best interests at heart?”
It would take time to unpack the potential impacts of a transition to an APP on working and retired Albertans, including teachers, Schilling said. He noted that it’s important for teachers to remember that their ATRF pension plan is in addition to the CPP and would be unaffected by a shift to an APP.
The CPP is an important facet of teachers’ retirement income. Teachers contribute to the CPP and receive payments just like other workers in the province, and so they also have a stake in what comes next.
Time to be heard
A move to an APP is not definite. Now that the APP report has been released, Alberta’s current and retired teachers, among other Albertans, have a chance to be heard. While teachers were not consulted about their TPP in 2019, they can now share their voice through the province’s engagement and consultation process.
“We want to hear from you because it’s your pension, your choice,” Smith said.
An online survey on the APP is live, and an engagement panel will begin hosting engagement sessions in October. Criticizing the government’s survey as biased—as it does not ask whether respondents support the notion of an APP—the New Democratic Party (NDP) also launched a survey to gain insight into Albertans’ perspectives on the pension plan.
Schilling encourages all teachers to raise their questions on the APP, whether through these surveys or to their MLAs.
“Teachers need to use their voice in this process,” Schilling said. “This is something that affects us all.”
| Competing pension surveys |
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The government’s survey is available at survey.alberta.ca. The NDP’s survey is found at albertasfuture.ca. |
