Canada’s Chief Actuary Report Conflicts with Alberta Pension Estimates
A new report reveals Alberta’s pension plan estimates may be overly optimistic, contradicting the chief actuary’s findings on CPP asset distribution.
Alberta, Canada, Pension Plan, CPP, Danielle Smith, Trevor Tombe
EDMONTON: So, there’s been some drama over Alberta’s pension plan. A report from Canada’s chief actuary says Alberta might not get the chunk of Canada Pension Plan (CPP) assets it thinks it deserves if it decides to break away.
The actuary’s report, which came out recently, claims Alberta’s estimate of snagging 53% of the CPP assets—around $334 billion—is way off. Apparently, it doesn’t align with federal pension laws.
This estimate was based on a study done for Alberta by LifeWorks earlier this year. But the chief actuary agrees more with a professor from the University of Calgary, who thinks Alberta’s share should be more like 20 to 25% of the total assets.
Trevor Tombe, the professor, was pretty clear: he said the LifeWorks formula is flawed. He also mentioned that while he gets why Premier Danielle Smith is frustrated, the report does give a straightforward way to calculate a number.
Smith has been adamant that her government won’t even think about a referendum on this until they have a solid figure from Ottawa. She thought the chief actuary would provide a detailed analysis, but it seems that didn’t happen.
Tombe pointed out that if you apply the LifeWorks data to the actuary’s formula, Alberta’s share might actually be around $135 billion. But he also warned that these numbers can change quickly since CPP assets fluctuate all the time.
The chief actuary, Assia Billig, noted that the LifeWorks approach could lead to some provinces ending up with a negative share, which goes against federal rules. This aligns with what an independent advisory council found, where most members sided with Tombe’s view.
Smith has been vocal about how she believes Albertans are getting a raw deal under the CPP. Her government even spent a hefty $7.5 million promoting the idea of a provincial pension plan, claiming it could mean lower contributions and better payouts for retirees.
They even set up a public panel to discuss this with Albertans but then put it on hold while waiting for a federal estimate.
Tombe thinks it’s important to have a public discussion about the pros and cons of a provincial pension plan, but he insists the Alberta government needs to be open about how they come to their conclusions.
Interestingly, even with all the hype about the benefits of a provincial plan, polls haven’t really changed much. Last week, a spokesperson from the federal finance department mentioned that they’re reviewing the actuary’s findings along with the provinces and territories.
They’re planning to have discussions in the coming weeks about what this all means and what the next steps might be.