The idea of Alberta creating its own pension plan has sparked significant debate. Supporters argue that an Alberta Pension Plan could save Albertans billions annually while maintaining or even improving benefits, often asking” What are the key financial benefits of an Alberta Pension Plan?”.
When we look at the Roadmap to Sovereignty we list the Alberta Pension Plan as step one to obtaining successful sovereignty so let’s break this down with actual numbers and analysis to explore the potential benefits of transitioning from the Canada Pension Plan (CPP) to an APP.
Key Financial Benefits of an Alberta Pension Plan
- Annual Savings for Workers and Employers
- Alberta workers and businesses contribute more to the CPP than they receive in benefits. Since its inception, Albertans have over-contributed by approximately $60 billion, with current annual over-contributions totalling $3 billion 1, 3.
- A shift to an Alberta Pension Plan could reduce contribution rates significantly. For example:
- On an individual level, workers earning at or above the Year’s Maximum Pensionable Earnings (YMPE) could save up to $1,425 per year. Employers would match this amount, resulting in combined savings of $2,850 per employee annually 1, 5.
- Improved Benefits for Seniors
- With the $5 billion annual savings, Alberta could enhance senior benefits. Options include:
- A one-time retirement bonus of $5,000–$10,000.
- Monthly pension increases beyond the current average CPP payout of $760.07 or maximum of $1,306.57 7.
- With the $5 billion annual savings, Alberta could enhance senior benefits. Options include:
- Business Competitiveness
Stability and Long-Term Security
- An initial asset transfer from the CPP to the APP would provide Alberta with a fund of approximately $334 billion, ensuring financial stability for decades 1, 3.
- The APP would benefit from Alberta’s younger population and higher employment rates, which result in a favourable contributor-to-beneficiary ratio compared to the CPP 5.
- Projections suggest that even with lower contribution rates, the APP would maintain positive net inflows for years, allowing assets to grow faster than expenditures 5.
Comparison: Contribution Rates and Savings
| Metric | Base APP | Base CPP | Difference |
| Minimum Contribution Rate | 5.91% | 9.54% | -3.63% |
| Annual Savings (Total) | $5 Billion | N/A | Significant |
| Individual Savings (Worker/Employer) | $1,425 each | N/A | Substantial |
What This Means for Albertans
- Workers: More take-home pay due to lower contributions and personal autonomy on how they invest these dollars to boost their retirement and investment plans.
- Seniors: Potentially higher monthly pensions or retirement bonuses.
- Businesses: Reduced costs per employee, boosting competitiveness, innovation and more.
Transitioning to an Alberta Pension Plan offers significant financial advantages for workers, seniors, and businesses alike while ensuring long-term stability through a substantial asset transfer and favorable demographics. While a referendum will ultimately decide this move, the numbers suggest that an APP could provide Albertans with both immediate savings and enhanced retirement security.
WHAT CAN ALBERTANS DO?
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We appreciate all of the support you can give us as we work together for a Free, Prosperous and Sovereign Alberta and for all who call Alberta home!
Article Sources
https://www.osfi-bsif.gc.ca/en/oca/oca-factsheets-other-reports/chief-actuary-position-paper-subsection-1132-canada-pension-plan
https://www.albertapensionplan.ca
https://open.alberta.ca/publications/app-analysis-lifeworks-report
https://albertafirstpension.ca/home
https://www.alberta.ca/alberta-pension-plan-engagement
https://open.alberta.ca/dataset/8453eb60-1ff8-4c87-9735-b253d4f28824/resource/ab628f2e-c365-4037-9070-ab65d8223d92/download/tbf-lifeworks-app-analysis-of-costs-benefits-risks-and-considerations-2023-08.pdf
http://pensionpulse.blogspot.com/2024/11/alberta-has-gotten-itself-in-real.html
https://www.albertapensionplan.ca/the-report