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Alberta

Potential investment manager for an Alberta pension plan—here are the facts

Published

2 years ago

6 minute read

From the Fraser Institute

As discussions around Alberta’s potential withdrawal from the Canada Pension Plan (CPP) continue, commentators have bombarded Albertans (and Canadians more generally) with sometimes misleading rhetoric, which can undermine the public’s understanding of this key issue. Albertans—and Canadians broadly—need facts to make well-informed decisions.

One key issue has been the potential investment manager for an Alberta pension plan. Specifically, commentators have implied that by leaving the CPP, Albertans retirement funds would no longer be managed by the Canada Pension Plan Investment Board (CPPIB) but rather by the Alberta Investment Management Corporation (AIMCo), which manages several public funds and pensions in the province.

This is not necessarily the case. The province has the option to retain the CPPIB as its investment manager, contract with AIMCo, create a new provider, or contract with the private sector. Put simply, an independent Albertan pension plan has options other than contracting with AIMCo.

But for argument’s sake, let’s assume AIMCo was chosen as the investment manager for an Alberta pension plan. There’s quite a bit of confusion regarding AIMCo that should be clarified. Perhaps most commonly, critics of AIMCo emphasize that the CPPIB has averaged 10 per cent annual returns over the past decade, higher than AIMCo’s 7.2 per cent.

While true, the CPPIB rate of return is distinct from the rate of return earned by contributors to the CPP. Put differently, an individual’s rate of return is not the same as the fund’s rate of return because of the way the CPP was originally designed. Some of the commentary written on this issue has implied that the lower rates of return at AIMCo would influence the benefits received by Alberta retirees. In fact, the retirement benefits Canadians receive from the CPP, and from a comparable Alberta pension plan, are based on several unrelated factors including how many years they’ve worked, their annual contributions and the age they retire. This is key since the CPP and a potential Alberta pension plan are largely based on current workers paying for current retirees, or what’s known as a pay-as-you-go system. Estimates suggest Canadian workers born in 1993 or later can expect a real rate of return of just 2.5 per cent from the CPP.

Given the pay-as-you-go nature of the plan, the key for the CPP, and one assumes for an independent Alberta pension plan, is that the fund earns a rate of return that allows for sustainable payments to retirees over time. The current required rate of return for the CPPIB is 6.0 per cent, which both it and AIMCo exceed.

Moreover, AIMCo, unlike the CPPIB, is constrained by the investment policies of each individual pension fund that it manages. Indeed, unlike the CPPIB, AIMCo is responsible for managing the funds of numerous pension plans, each with their own investment objectives, risk tolerances and asset mixes AIMCo must follow.

For instance, the Management Employees Pension Plan, one of AIMCo’s largest pension funds, requires that 20 per cent to 45 per cent of the market value of the plan’s assets be invested in “inflation sensitive” investments, which include real estate, renewable resources and other assets that may have lower returns compared to alternatives such as investments in private equity. These constraints can limit AIMCo’s overall rate of return, while the CPPIB, unencumbered by the investment policies of other pension funds, has the flexibility to invest according to its core objective, which is to maximize returns adjusted for risk. Put differently, Albertans could grant AIMCo the same flexibility—it all depends on the investment policy implemented if an Alberta pension plan were created.

Finally, opponents also argue that the CPPIB fund’s size (more than $575 billion) makes it superior to any potential provincial fund. Yet the evidence suggests that despite its size, the CPP is not a low-cost pension plan. In fact, according to an analysis by Philip Cross, former chief analyst at Statistics Canada, the CPP’s cost at 1.07 per cent of assets was higher than the other analyzed pension plans, which ranged from 0.34 per cent to 1.02 per cent. And the CPP’s costs have skyrocketed from $4 million in 2000 to 4.4. billion annually, largely due to an increase in staff and compensation. For perspective, the CPPIB had only five employees in 2000; by 2020 it employed nearly 2,000 people. And critically, these changes have not increased the fund’s net returns.

Ultimately, it will be up to Albertans to decide if they want to opt out of the CPP for an Alberta pension plan, but to make that decision, they must be armed with facts. That includes clarifying some misunderstanding on two potential investment managers—CPPIB and AIMCo.

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Alberta

Median workers in Alberta could receive 72% more under Alberta Pension Plan compared to Canada Pension Plan

Published on July 15, 2025

By

From the Fraser Institute

By Tegan Hill and Joel Emes

Moving from the CPP to a provincial pension plan would generate savings for Albertans in the form of lower contribution rates (which could be used to increase private retirement savings while receiving the same pension benefits as the CPP under the new provincial pension), finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Due to Alberta’s comparatively high rates of employment, higher average incomes, and younger population, Albertans would pay a lower contribution rate through a separate provincial pension plan while receiving the same benefits as under the CPP,” said Tegan Hill, director of Alberta policy at the Fraser Institute and co-author of Illustrating the Potential of an Alberta Pension Plan.

Assuming Albertans invested the savings from moving to a provincial pension plan into a private retirement account, and assuming a contribution rate of 5.85 per cent, workers earning the median income in Alberta ($53,061 in 2025) could accrue a stream of retirement payments totalling $454,741 (pre-tax)—a 71.6 per cent increase from their stream of CPP payments ($264,968).

Put differently, under the CPP, a median worker receives a total of $264,968 in retirement income over their life. If an Alberta worker saved the difference between what they pay now into the CPP and what they would pay into a new provincial plan, the income they would receive in retirement increases. If the contribution rate for the new provincial plan was 5.85 per cent—the lower of the available estimates—the increase in retirement income would total $189,773 (or an increase of 71.6 per cent).

If the contribution rate for a new Alberta pension plan was 8.21 per cent—the higher of the available estimates—a median Alberta worker would still receive an additional $64,672 in retirement income over their life, a marked increase of 24.4 per cent compared to the CPP alone.

Put differently, assuming a contribution rate of 8.21 per cent, Albertan workers earning the median income could accrue a stream of retirement payments totaling $329,640 (pre-tax) under a provincial pension plan—a 24.4 per cent increase from their stream of CPP payments.

“While the full costs and benefits of a provincial pension plan must be considered, its clear that Albertans could benefit from higher retirement payments under a provincial pension plan, compared to the CPP,” Hill said.

Illustrating the Potential of an Alberta Pension Plan

  • Due to Alberta’s comparatively high rates of employment, higher average incomes, and younger population, Albertans would pay a lower contribution rate with a separate provincial pension plan, compared with the CPP, while receiving the same benefits as under the CPP.
  • Put differently, moving from the CPP to a provincial pension plan would generate savings for Albertans, which could be used to increase private retirement income. This essay assesses the potential savings for Albertans of moving to a provincial pension plan. It also estimates an Albertan’s potential increase in total retirement income, if those savings were invested in a private account.
  • Depending on the contribution rate used for an Alberta pension plan (APP), ranging from 5.85 to 8.2 percent, an individual earning the CPP’s yearly maximum pensionable earnings ($71,300 in 2025), would accrue a stream of retirement payments under the total APP (APP plus private retirement savings), yielding a total retirement income of between $429,524 and $584,235. This would be 22.9 to 67.1 percent higher, respectively, than their stream of CPP payments ($349,545).
  • An individual earning the median income in Alberta ($53,061 in 2025), would accrue a stream of retirement payments under the total APP (APP plus private retirement savings), yielding a total retirement income of between $329,640 and $454,741, which is between 24.4 percent to 71.6 percent higher, respectively, than their stream of CPP payments ($264,968).

 

Tegan Hill

Director, Alberta Policy, Fraser Institute

Joel Emes

Joel Emes

Senior Economist, Fraser Institute
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Alberta

Alberta ban on men in women’s sports doesn’t apply to athletes from other provinces

Published on July 15, 2025

By

From LifeSiteNews

By Clare Marie Merkowsky

Alberta’s Fairness and Safety in Sport Act bans transgender males from women’s sports within the province but cannot regulate out-of-province transgender athletes.

Alberta’s ban on gender-confused males competing in women’s sports will not apply to out-of-province athletes.

In an interview posted July 12 by the Canadian Press, Alberta Tourism and Sport Minister Andrew Boitchenko revealed that Alberta does not have the jurisdiction to regulate out-of-province, gender-confused males from competing against female athletes.

“We don’t have authority to regulate athletes from different jurisdictions,” he said in an interview.

Ministry spokeswoman Vanessa Gomez further explained that while Alberta passed legislation to protect women within their province, outside sporting organizations are bound by federal or international guidelines.

As a result, Albertan female athletes will be spared from competing against men during provincial competition but must face male competitors during inter-provincial events.

In December, Alberta passed the Fairness and Safety in Sport Act to prevent biological men who claim to be women from competing in women’s sports. The legislation will take effect on September 1 and will apply to all school boards, universities, as well as provincial sports organizations.

The move comes after studies have repeatedly revealed what almost everyone already knew was true, namely, that males have a considerable advantage over women in athletics.

Indeed, a recent study published in Sports Medicine found that a year of “transgender” hormone drugs results in “very modest changes” in the inherent strength advantages of men.

Additionally, male athletes competing in women’s sports are known to be violent, especially toward female athletes who oppose their dominance in women’s sports.

In February, Andres ranted about why men should be able to compete in women’s competitions, calling for “the Ontario lifter” who opposes this, apparently referring to powerlifter April Hutchinson, to “die painfully.”

Interestingly, while Andres was suspended for six months for issuing death threats, Hutchinson was suspended for two years after publicly condemning him for stealing victories from women and then mocking his female competitors on social media. Her suspension was later reduced to a year.

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