Dear Editor,
Re: Let’s examine the value of CPP against APP, Oct. 4
Like many Albertans, I am unsure if having an Alberta Pension Plan (APP) is better than a Canada Pension Plan (CPP) for Albertans.
I read the letter to the editor and found it was mostly speculation about the CPP and the plans going forward. The letter also noted that retired government employee contributions, managed by the Alberta pension fund (Alberta Investment Management Company – AIMCO), receive higher benefits than CPP. That’s true, however, being a retired GOA employee myself, I paid a great deal more into that fund than I did into CPP.
The letter noted the “Ponzi” nature of CPP, speculating that a lot of potential retirees will collect absolutely nothing. In the 1990s, this was a worry for Canadians. The Canadian government has since taken steps to ensure the viability and continuation of the fund.
According to a Sept. 28 article in the Financial Post, a separate investment pool was created by the federal government in 2019, with agreement from all of the provinces, to enhance the CPP core assets. This pool is expected to grow to around to $92.5 billion in 2027 from $11 billion in 2021. By 2030, this fund is expected to be $199.6 billion and $1.5 trillion in 2050.
Should Alberta withdraw from CPP, which could be completed by 2027, its share would be 17 per cent of this pool as of 2027. The claim that Alberta is entitled to over 50 per cent of the current CPP assets is debatable and may be settled in the courts.
The Life Work report, commissioned by the UCP, states the set-up costs for an APP would range from $100 million to $1 billion based on the various options. The ongoing related costs would range from $100 million to $150 million. The cost to implement invest management structure could cost $1.2 billion.
The funds that could be generated by an APP are speculative at best. The numbers are dependent on how the fund is managed. Life Works notes that Alberta could amend or change its pension plan once it’s been established.
I have looked at the survey that the UCP has posted online. The site outlines again speculative numbers and states, “Steps are underway and could lead to a ‘possible’ referendum.” I found the survey to be biased and questions asked are under the assumption that the APP has been established. It does not ask the simple question: Do you want an Alberta Pension Plan?
Everything aside, my opinion is that the current system we have now will benefit me, my family and future generations of Albertans better than the proposed APP for decades to come. I believe our federal government has the potential for larger growth of the fund and can better manage any potential crisis that may occur.
I don’t trust a government that can’t even manage its own health care system to manage my money. I also don’t believe this government would allow the investment dollars from an APP to be free from political interference and untouchable.
Eunice Kondro
Okotoks