The Alberta government is looking for an external analysis of the potential risks and benefits of a provincial pension plan.
In a request for proposals issued last Thursday and closing Oct. 13, the government says it wants a detailed analysis of the costs, benefits and structure of a potential provincial pension plan if Alberta left the Canada Pension Plan (CPP).
“This analysis shall include actuarial, economic, legal, and technical information regarding the establishment and ongoing operation of an Alberta Pension Plan. This analysis will give all of us a clearer picture on what a future provincial pension plan may look like and help answer key questions that Albertans are asking about the costs and benefits of such a move,” says a posting on the government’s purchasing website.
The request for proposals comes nearly three months after the Fair Deal Panel suggested the Alberta government consider creating its own pension plan. At the time, Premier Jason Kenney said he was tasking the department of finance with doing an analysis.
“I have tasked the department of finance with preparing a detailed analysis of the cost, benefits and structure of a potential Alberta Pension Plan,” he said June 17.
“If that analysis concludes that an Alberta provincial pension would be a net benefit to Albertans we would then proceed to give Alberta voters the final say on the proposal in a province-wide referendum.”
In a statement, Charlotte Taillon, acting press secretary for Treasury Board and Finance, said seeking input from outside experts is a common practice in government analysis of major policy proposals.
“In order to ensure that Albertans can make an informed decision on whether or not our province moves forward and establishes an Alberta Pension Plan, the department is engaging the relevant expertise to report back on the benefits, costs, and structure of what a potential plan will look like,” she said.
Taillon did not say how much the report is expected to cost.
“More information on the costs will be available as bids are submitted,” she said.
As of Monday afternoon, 28 companies were listed on the government’s website as interested bidders.
The analysis, to be submitted to the government in early 2021, must include details on the required contribution rate, how much would be transferred from CPP in terms of the assets and liabilities, whether the Alberta Pension Plan would provide the same level of pension benefits as CPP and how easily might these benefits change in the future.
The government wants to find out how moving between an Alberta plan, the CPP and international retirement plans would work for those moving between provinces and/or countries during their work years or retirement
The final report would also include how an Alberta plan would affect other government programs (e.g., Alberta Seniors Benefit or Assured Income for the Severely Handicapped) and how might future demographic and economic changes impact an Alberta Pension Plan.
Kenney has said the persuasive arguments for the move include that Alberta’s young population means it could offer better pensions than the rest of Canada.
The government’s own documentation acknowledges that the small size of the pool relative to the CPP means less ability to spread out the risk and therefore more volatility. There are also questions about whether Alberta would be able to leave the CPP without the support of other provinces.
The Fair Deal Panel, tasked with coming up with ways to improve Alberta’s place in the federation, made the recommendation that the government consider a provincial pension plan despite the fact that the majority of people surveyed as part of the panel’s report don’t support the idea.
Only 42 per cent of the people polled think an Alberta Pension Plan would improve the province’s place in the federation a lot or somewhat, according to data released with the report.