During the election campaign earlier this year, Alberta Premier Danielle Smith did everything she could to avoid talking about her party’s proposed Alberta Pension Plan.
Now, she and her government can’t stop talking about it.
The machinery of government has been pumping out advertisements and will keep itself busy over the coming week, with telephone town halls on the matter.
Politics is very good at dealing with what’s happening now and less great at dealing with long-term issues, seeing how the calculus is all about maximizing electoral returns.
What’s right is ensuring Albertans have access to a stable pension plan with a track record of generating financial returns for its members.
What’s expedient is to continue to stoke old political coals to persuade Albertans they are somehow getting screwed by the rest of Canada.
In this case, Smith and her UCP government argue Albertans could pay less into a new provincial pension plan, due to the relative youth of the population.
While this might be true for now, be wary of how things might turn out in the future.
Quebec’s establishment of its own pension system was also spurred, in part, by similar arguments.
At first, Quebecers’ contribution rates to their pension plan were lower than those of the CPP. Butand are now higher than those for CPP, according to one Montreal academic writing in the Edmonton Journal.
(And this is despite the fact the Quebec pension’s investment arm, the Caisse de dépot and placement du Québec, is considered a top-notch performer.)
If you take a peek at, if trends persist.
In about thirty years, when everyone currently in their mid-30s will be ready to retire, the chart still looks good. But thirty years after that, there’s a chance there won’t be enough young people in Alberta to support the relatively larger numbers of retirees.
Yes, pension plans are supplemented by investments and don’t solely rely on contributions from their members — but future demographic shifts should still be a cause for concern.
I also take issue with the idea that Albertans are somehow being short-changed by the CPP system.
For all the economic trouble that comes and goes around this place, Alberta remains a well-moneyed jurisdiction.
Our household incomes are higher here than anywhere else, thanks to the influence of the oil and gas sector.
If our population remains relatively young, then it stands to reason we aren’t getting the full share of payments.
At the end of the day, when retirement comes, those who made more during their career are entitled to larger payouts.
The money has to come from somewhere.
In that light, the whole idea of keeping our money at home seems quite odd. One would think a future Alberta Pension Plan would want and need to invest its money all over the place to generate the returns required to make pension payments.
Why not be part of a larger pension pool?
Alberta’s third-party report on the proposed provincial pension plan has calculated that this— an assumption blasted by all kinds of economists.
Much of the presumed performance of an Alberta Pension Plan rests upon numbers that seem too good to be true.
If this entire thing has you skeptical, there’s good reason to feel that way.
There was no grassroots groundswell for this.
Rather, this is one of the results of a government-led exercise whose goal was to demonstrate Alberta wasn’t getting a fair deal from Confederation.
That’s hardly an objective starting point.
The entire process surrounding the potential creation of an Alberta Pension Plan has been disingenuous from Day 1. It is untrustworthy and unsalvageable.
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