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).