Citing recommendations made by its Fair Deal Panel, the Alberta government is now accepting bids for a contract to study the pros and cons of opting out of the Canada Pension Plan and setting up a provincial benefit program in its place.“The province is seeking a detailed analysis of the costs, benefits and structure of a potential Alberta Pension Plan,” the RFP reads. “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.”The RFP also notes that identifying risks and coming up with plans to mitigate them will be expected from whomever is hired to complete the report. The RFP was posted on Sept. 10 and is accepting proposals until Oct. 13. Story continues below advertisement
Global News reached out to the Alberta Treasury Board and Finance department for a statement on the RFP and for details on how much the study is expected to cost. In an email to Global News on Wednesday, the press secretary for Finance Minister Travis Toews said information on the costs of the study will become available as bids are submitted.“Seeking input from outside experts is a common practice in government analysis of major policy proposals,” Jerrica Goodwin said. “The premier directed Treasury Board and Finance to do a fulsome analysis of the potential Alberta Pension Plan.“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.”In an email interview with Global News on Wednesday, Lori Williams, an associate professor of policy studies at Calgary’s Mount Royal University, said news that the government is moving forward with paying for such a study may not be well-received by all Albertans.“Concerns about precarious personal and provincial finances will likely lead to skepticism about any non-essential expenditures,” she said.Last year, Premier Jason Kenney said there was a “compelling case” for looking at whether Alberta should withdraw from the CPP. If his government moves forward with the idea, Alberta would pull its share of the $400-billion pool of assets that are handled by the investment manager, the Canada Pension Plan Investment Board. Story continues below advertisement
All provinces in Canada are currently part of the CPP except for Quebec, which manages its own pension plan.
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READ MORE: Business groups cautious about idea to create Alberta provincial pension plan Because of Alberta’s young population compared to other provinces, the province is the biggest net contributor to the CPP, Kenney has said.The NDP Opposition has argued that if Alberta leaves the CPP, it would be a money-losing proposition, in part because of administration and insurance costs, and that the premier is motivated to do so to spite the federal Liberal government.READ MORE: Kenney, NDP trade barbs on pitch for Alberta to quit CPP, build own pension plan In June, Kenney said he believes exploring the possibility of there being fiscal benefits to setting up a provincial pension plan is worth a closer look.“We’re going to do an exhaustive study on the costs, benefits and structure of a potential Alberta Pension Plan because we believe Albertans are every bit as capable as Quebecers or the federal government in managing a public pension plan,” he said in the Alberta legislature.READ MORE: Kenney says proposal to pull Alberta out of CPP due to hostility from others In its report released earlier this year, the Fair Deal Panel said if the province leaves the CPP and sets up a provincial pension plan, it believes “Alberta’s hypothetical contribution rate could be reduced from the present rate of 9.9 per cent to as low as 8.5 per cent.” Story continues below advertisement
“That represents an opportunity for Albertans to keep the approximately $3 billion annual subsidy to the rest of Canada,” the report says.The Canadian Press has reported that if Alberta moves forward with establishing its own pension plan, the Alberta Investment Management Corp. (AIMCo) would administer it.Williams said criticism of AIMCo’s performance of late could make it difficult for the government to gain support from voters for the plan if it decides to move forward with it.“Even though the numbers have improved slightly, confidence in AIMCo’s investment record has been damaged by questionable decisions leading to dramatic losses,” she said. “Pensions are meant to be stable and reliable, and if an Alberta pension plan is seen as higher risk, many will not want to shift.“The reality is that the CPP is one of the things the federal government does a good job on.”READ MORE: AIMCo announces former CEO of CPP Investment Board to chair its board of directors Williams added that because Alberta’s “current and prospective economic fortunes appear worse than anywhere else in the country,” some Albertans are becoming more appreciative of the benefits of belonging to a federation that is able to help during a time of economic turmoil.“Some Albertans recognize they may have to move to greener economic pastures, and want to assure the value and portability of their pensions,” she said. Story continues below advertisement
In her email on Wednesday, Goodwin added that the government has always noted that “should the analysis suggest that moving forward is in the best interest of Albertans, the decision will be subject to approval in a democratic, provincewide referendum.”READ MORE: Alberta government hiring staff to study feasibility of replacing RCMP with new police force The provincial government is also currently looking to hire a contractor to study the benefits and costs of a proposed provincial police force that could replace the RCMP.–With files from The Canadian Press’ Dean Bennett and Andy Blatchford
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