The Alberta Pension Advantage? A Quantitative Analysis of a Separate Provincial Plan

Canadian Public Policy, Forthcoming

30 Pages Posted: 16 Nov 2023

See all articles by Trevor Tombe

Trevor Tombe

University of Calgary - Department of Economics

Date Written: October 17, 2023


A separate Alberta Pension Plan (APP) has gained renewed attention. This paper assesses the long-run viability of such a plan, using both a detailed quantitative model and simple, intuitive approaches. I find only modest scope for changes in benefit levels and contribution rates relative to the Canada Pension Plan (CPP). Specifically, I estimate an APP minimum contribution rate of 8.2 percent, compared to the CPP's 9.5 percent. With the same 0.4 percentage point cushion as in the CPP, the APP legislated contribution rate would then be 8.6 percent. This is in sharp contrast to a recent government-commissioned report, which found a contribution rate of 5.9 percent (LifeWorks, 2023). I explain this disparity and show that much depends on how one interprets imprecise language in the CPP Act. I also explore several relevant risks. Alberta’s positive net migration flows, for example, account for nearly two-thirds of its pension advantage. And, depending on the time horizon, investment risks may eliminate its entire advantage. Overall, this paper not only provides an updated foundation to evaluate the strengths and weaknesses of an APP but also to understand pension sustainability more broadly.

Keywords: Canada Pension Plan, Alberta Pension Plan, Demographics, Government Finances

JEL Classification: H55, H75

Suggested Citation

Tombe, Trevor, The Alberta Pension Advantage? A Quantitative Analysis of a Separate Provincial Plan (October 17, 2023). Canadian Public Policy, Forthcoming, Available at SSRN: or

Trevor Tombe (Contact Author)

University of Calgary - Department of Economics ( email )

2500 University Drive NW
Calgary, Alberta T2N 1N4
403-220-8068 (Phone)


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