Western Standard - September 21, 2023


Report says Alberta provincial pension move could save people billions

Mentioned
Nate Horner Jim Denning
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Episode Stats


Length

5 minutes

Words per minute

169.31

Word count

953

Sentence count

53


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In the fall of 2019, Alberta s government launched the Fair Deal Panel to advance Alberta s economic interests and look at ways that Alberta could achieve a fair deal in Confederation. One of the items the panel considered and discussed with Albertans through a series of town halls was an Alberta Pension Plan. Was it possible that Albertans could receive better pension benefits by contributing to a Made in Alberta Pension plan? And if so, what would that look like?

Transcript

Transcript generated with Whisper (turbo).
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.560 Well, good morning.
00:00:01.560 I'm pleased to be here today with Nate Horner, our President of Treasury Board and Minister
00:00:05.560 of Finance, and by Jim Dinning, our Chair of the Alberta Pension Plan Engagement Panel.
00:00:11.420 In the fall of 2019, Alberta's government launched the Fair Deal Panel to advance Alberta's
00:00:16.200 economic interests and look at ways that Alberta could achieve a fair deal in Confederation.
00:00:21.600 One of the items the panel considered and discussed with Albertans through a series
00:00:25.300 of town halls was an Alberta pension plan.
00:00:28.040 Was it possible that Albertans could receive better pension benefits by contributing to
00:00:32.840 a Made in Alberta pension plan?
00:00:35.160 And if so, what would that look like?
00:00:38.020 Well today we want to update you on our work in exploring this opportunity.
00:00:41.700 In 2020, Alberta's government commissioned LifeWorks, an independent third-party expert
00:00:46.100 consultant to examine the potential of an Alberta pension plan and identify what it could mean
00:00:51.520 for Albertans.
00:00:52.520 LifeWorks' report shows that creating our own pension plan could benefit all Albertans.
00:00:57.920 According to their analysis, an Alberta pension plan could increase benefits for seniors,
00:01:02.600 reduce premiums for workers, and protect the pension interests and benefits of all Albertans.
00:01:08.100 The LifeWorks' analysis estimates that Albertans could save more than $5 billion in the first
00:01:13.720 year alone if we moved from the CPP to an Alberta pension plan.
00:01:18.040 That's because hard-working Albertans have paid much more into the CPP than Alberta's seniors get back in pension benefits.
00:01:25.040 What does $5 billion in savings mean for Albertans?
00:01:28.220 Well, there are a few potential scenarios.
00:01:30.220 $5 billion could mean more money for seniors who could see larger monthly pension benefits.
00:01:35.720 Seniors might even receive a $5,000 to $10,000 bonus payment when they retire if that's how Albertans want to design the pension.
00:01:43.040 There's more money for their household at a critical time.
00:01:47.720 $5 billion could mean larger paychecks for employees.
00:01:50.040 If we put the entire amount towards reducing premiums, Alberta's workers would pay $1,425 less in annual premiums to an Alberta pension plan than they do right now in CPP premiums.
00:02:04.040 Even a portion of that would be a major affordability boost for families struggling to buy groceries and pay for other priorities.
00:02:11.040 And because employers match the CPP premiums their employees pay, it would also mean savings for our businesses and less of their earnings being sent to Ottawa.
00:02:22.720 That's annual savings of $1,425 per year per worker could be invested back in the company or used to hire more workers, strengthening the Alberta advantage.
00:02:33.720 Another important benefit of an Alberta pension plan is it would be more stable than the current federal plan.
00:02:39.720 With a potential transfer of over $300 billion in assets from the CPP, an Alberta pension plan would be able to deliver benefits over the long term at a lower cost than the CPP.
00:02:50.720 This is possible because Alberta's younger demographic and strong labour force.
00:02:54.720 According to the analysis, an Alberta pension plan would have a much bigger pool of assets compared to its number of retirees.
00:03:02.720 And that means great pension security for Albertans.
00:03:06.720 With an Alberta pension plan, Albertans would not only have more money in their pockets, that money would be portable.
00:03:12.720 So employees would be able to move and work throughout other provinces and territories without disrupting their benefits.
00:03:19.720 Just as it is with Quebec's provincial pension plan.
00:03:23.720 Alberta's government would work with our partners in the Quebec pension plan and the CPP so that whether you live in Alberta or move across the country,
00:03:30.720 you would still receive your pension benefits with no disruption or decrease.
00:03:34.720 The reality is since the inception of the CPP, Albertans have been paying much more into it than they've gotten back during that same time.
00:03:42.720 About $60 billion more.
00:03:45.720 And with compound interest, our share has grown to $334 billion, which is about $75,000 per Albertan.
00:03:53.720 It's not insignificant.
00:03:55.720 Alberta is the economic engine of Canada.
00:03:57.720 And our young population, our nation-leading employment rate and higher pensionable earnings means that we're providing an outsized contribution to CPP.
00:04:06.720 And as our population continues to grow, so do the number of Albertans contributing to a pension plan.
00:04:12.720 As more people see Alberta as a desirable place to find a job and raise a family, an Alberta pension plan would become even more secure from having more workers contributing to the plan.
00:04:22.720 Alberta's prosperity has been made possible by the hard work and pro-growth policies of our government.
00:04:28.720 We already subsidized many federal programs because of our productivity, but we can choose to have our pension contributions stay in Alberta to ensure it's there when we retire.
00:04:38.720 I believe that an Alberta pension plan would be fairer and could make life more affordable for all Albertans.
00:04:44.720 It could bring more benefits for seniors, higher take-home pay for workers, and strengthen the Alberta advantage to attract business.
00:04:50.720 I believe it's the right decision for our province.
00:04:53.720 But I also believe in making sure that every Albertan has their say.
00:04:56.720 We want to hear what you believe. It's your pension. So it's your choice.
00:05:00.720 As we have always said, we won't make any decisions on establishing an Alberta pension plan until Albertans have their say.
00:05:08.720 Now that we have this report with the most up-to-date numbers, we're turning the discussion over to Albertans and a panel led by former Finance Minister Jim Dinning.
00:05:16.720 We want to hear your thoughts and concerns through this panel.
00:05:20.720 And if we hear that Albertans are interested and supportive of taking next steps, we will work toward providing you with the opportunity to choose an Alberta pension plan in a referendum.
00:05:30.720 I will now turn it over to Minister Nate Horner to provide.