The Alberta government has introduced new legislation, Bill 2, known as the Alberta Pension Protection Act, which guarantees a referendum on the provincial pension plan. This means that there will be no Alberta Pension Plan unless it is approved by Albertans in a referendum.
The bill aims to provide lower contribution rates and similar or better benefits for retirees. It also states that any funds transferred from the Canada Pension Plan (CPP) will be used solely for the setup and operation of the Alberta Pension Plan (APP).
The United Conservative Party (UCP) has been promising a referendum for several months, and this bill will enforce that promise. Finance Minister Nate Horner stated that the government is committed to ensuring the safety and growth of the pension plan to provide retirement security for future generations.
An independent report by LifeWorks estimates that the APP could be supported with lower contribution rates compared to the CPP. This could potentially save Alberta employees and employers up to $1,425 per year for each employee.
Finance Minister Horner emphasized that the legislation is designed to protect the interests of Albertans and ensure that their pensions and benefits will always be available to them. He stated that the funds in the CPP that belong to Alberta should be used to further improve the APP benefits.
According to the government news release, the CPP Act already requires a provincial pension plan to offer benefits comparable to the CPP to qualify for withdrawal. This means that Alberta could use some of the estimated $5 billion in annual savings to enhance the APP benefits.
The LifeWorks report also estimates that Alberta is owed $334 billion from the CPP, including compounded investment returns on the net contribution. The legislation intends to use this large asset transfer to support a sustainable provincial pension plan for generations to come.
The UCP is encouraging residents to review the LifeWorks report on the APP and provide their feedback. The Alberta Pension Plan Engagement Panel is currently hosting regional telephone town halls and has a public survey open until December 10 to gather input from Albertans.
This legislation aims to ensure that Albertans have a say in the establishment of the Alberta Pension Plan and that their interests are protected. The government believes that the APP can provide a secure and sustainable pension plan for the province.