Alberta Pension Plan

[Surrealplaces]

An APP is likely a bad idea as it would manage too small an asset pool. That being said, CPP is a bad deal as most workers would do better investing the money on their own. Something along the lines of Australia's Superannuation, akin to mandatory RRSP conditions, would be much better.

The real motivation behind this is to up the stakes. If a malevolent Federal government wants to push through discriminatory industry specific emissions caps or clean electricity requirements, Alberta has to position itself as ready to burn the federation to the ground. Of course Trudeau resigning or the Liberals losing the next election would be significant de-escalation and would remove much of the motivation behind a APP.

Years back I had concerns about the CPP (due to different news articles and media expressing concern the CPP wouldn't be enough) and made a plan to deduct money from every paycheck toward my own RRSP investments as a backup in case something happened with the CPP.
It was meant to augment CPP, but will be ultimately pay better....depending on how long I live of course. It'll pay better for at least the first 25 years of retirement. The CPP might pay better in the end depending on how long I live, but for the most part having the personal investment plan has worked out well. If I had have put all of my CPP contributions to my own plan instead of CPP, it almost certainly would have worked out better for me, but I also understand why they have a national pension plan and I'm okay with having both.
My advice to any younger people is to deduct a bit of money from each paycheck toward another separate plan to at least augment CPP. It doesn't have to be much - my deductions were less then the CPP deductions and I didn't always do it every paycheck, there were periods when I didn't deduct - but if done over a long period, it'll add up substantially.

I'm still interested in what happens with CPP and APP, but TBH, I'm mostly interested as far as how it'll affect other people.

 

[darwink]

Math is changing now with the CPP coverage amount growing. Someone starting in the labour force today that ended up peaking at median income will end up fine without supplemental savings if they own a residence.

 

[Surrealplaces]

Math is changing now with the CPP coverage amount growing. Someone starting in the labour force today that ended up peaking at median income will end up fine without supplemental savings if they own a residence.

Agreed. Having gotten to the point I'm at now with 20/20 hindsight, I can see the CPP is still going strong, and not as much personal investment was needed. If I was asked for advice today, I would still suggest having some extra investments on the side, mixed in with real estate as well.

 

[Mountain Man]

I'd rather the UCP just fuck off and not try to change things purely for the sake of sticking it to Ottawa. I'm Canadian first, Calgarian second and Albertan third.

 

[CBBarnett]

The real motivation behind this is to up the stakes. If a malevolent Federal government wants to push through discriminatory industry specific emissions caps or clean electricity requirements, Alberta has to position itself as ready to burn the federation to the ground. Of course Trudeau resigning or the Liberals losing the next election would be significant de-escalation and would remove much of the motivation behind a APP.

Makes sense - that's why all those financial planning channels always start with #1 rule for prudent pension management and retirement investment planning best practices - spite and brinkmanship! Especially if the spite and brinkmanship are about a random grab-bag of real or imaginary issues, that are not always even related to finances.

Forget diversifying the portfolio or maintaining stable contribution rates over your working life time - using your retirement savings as a political weapon against your enemies is the secret to ensuring the best returns!

 

[Habanero]

Agreed. Having gotten to the point I'm at now with 20/20 hindsight, I can see the CPP is still going strong, and not as much personal investment was needed. If I was asked for advice today, I would still suggest having some extra investments on the side, mixed in with real estate as well.

The CPP will be fine when we hit those retirement ages ( I have about 20 years to go) but I agree 100% about having other investments as well. One shouldn’t rely on one single source like the government for retirement. It’s always wise to have a mix.

 

[CBBarnett]

The CPP will be fine when we hit those retirement ages ( I have about 20 years to go) but I agree 100% about having other investments as well. One shouldn’t rely on one single source like the government for retirement. It’s always wise to have a mix.

IIRC, the CPP was never really envisioned to completely replace most earnings, but provide a basic ability to maintain your life when you exit the workforce as a senior. It layers on to supplement the universal OAS benefit, and generally acts as a backstop so you know you will have some income when you retire regardless of how well you personally saved, invested or got lucky/unlucky elsewhere. It won't be much, but enough to scrape by. It's a good thing that the CPP is being enhanced to help ensure that basic level of coverage is more robust - many people would not save even this basic amount if they weren't automatically enrolled via their payroll deductions.

For those with higher incomes and spending, CPP + OAS isn't likely enough to maintain living standards on their own. But if you pay off your mortgage before retirement, save reasonably well when the times are good and have a bit of luck avoiding life-changing injuries or illness, reduce your living costs + CPP + OAS + any personal savings will keep things comfortable.