Off-The-Scale Interest at a CPP Investments Public Meeting in Alberta

Matthew Black of the Edmonton Journal reports hundreds turn out to discuss state of CPP, possible Alberta pension plan:

Hundreds turned out Wednesday night to hear Canada Pension Plan Investment Board (CPPIB) officials discuss the state of the national retirement plan while acknowledging Alberta’s ongoing discussion about leaving it.

The public meeting was one the CPPIB is required to hold in each province at least once every two years and came on the heels of a similar event in Calgary on Tuesday night. 

Wednesday’s event had to be moved to a bigger venue, at a downtown hotel, with organizers estimating the crowd to be around 400, with government MLA Jason Stephan and Opposition MLA Lorne Dach among those in attendance.

In his opening statement, CPPIB Senior Managing Director Michel Leduc characterized the Canada Pension Plan (CPP) as a “public policy success story” and “national treasure” that was the envy of other countries.

Leduc took 27 questions from the floor over the course of the meeting which lasted just over 90 minutes.

Many of them alluded to the province’s ongoing push to leave the CPP and create its own provincial pension plan.

“We respect Alberta’s right to determine whether it will remain a part of our national plan,” he said.

Leduc didn’t directly address the merits of an Alberta pension plan but noted the CPP’s superior size and ability to pool assets. 

“When it comes to pensions, there are strength in numbers,” he said, and stated the plan was sustainable for at least the next 75 years.

Others questioned the level of government involvement in both the national plan and a theoretical Alberta pension plan, with Leduc responding that CPP assets were “strictly segregated” from politicians.

“The single biggest, most powerful protection from government interference is that there are ten governments involved that at any point in time are across the political spectrum,” he said, in a reply that drew applause from those there. 

‘It works very well’

Fred Dieno said he travelled from Red Deer to attend the meeting and sat with a sign reading “hands off our CPP” as he listened.

“To me it makes more sense to leave it alone and let it work the way it’s supposed to work,” he said. “It works very well.”

Alice Campbell said she left the meeting still harbouring questions about Alberta leaving the CPP. 

“It seems like something we could do, but I’m not sure yet,” she said.

Others were more skeptical of the CPP and questioned its staffing, expenditures, and rate of return, with one attendee asserting she would’ve been better off storing her savings under her mattress.

Leduc cautioned against comparing the return of short-term investments with the longer-term goals of a pension plan, citing the CPP’s 10 per cent return on investment over the past decade.

“Ten per cent you may think is a little vanilla-flavoured but for a public fund, it’s No. 1.” 

Robert Boisvert said it was his first time attending such an event but that he felt it was important to get a better understanding of the issue.

He called on the province to instead pursue a pension plan that would supplement, rather than replace the national plan, something Ontario attempted in the mid 2010s though it was blocked by the federal government .

“Don’t go disrupting this plan. It’s not going to benefit anybody,” he said adding leaving CPP would be risky for Albertans and “cold and callous” to fellow Canadians.

“I don’t think we’re going to get the same returns.” 

CPPIB unlikely to manage Alberta plan

The government’s pension report has no official standing in determining how much Alberta would be able to withdraw from the CPP. That figure is being determined by the office of the chief actuary and is expected to be published some time in the fall .

That report also touts the CPPIB as the cheapest possible manager of an Alberta pension plan, though that appears to be an improbable option. 

Legislation governing the board would have to be changed first, and would require approval seven out of 10 provinces representing at least two-thirds of the population, effectively handing a veto to Ontario, which has been among the most outspoken opponents of Alberta leaving the national plan.

The government has stonewalled Postmedia’s repeated efforts to secure the results of the pension engagement survey, though other polling data and public feedback to the government indicates leaving the CPP is a largely unpopular prospect to Albertans.

Pension engagement panel chair Jim Dinning said in December about half of the feedback gathered by the panel had been opposed to leaving the CPP.

Speaking at the legislature Wednesday, Finance Minister Nate Horner said he was unsure if that ratio had changed.

He characterized the CPPIB as “good managers” but said any progress towards a provincial plan was effectively paused until the actuary reports back. 

Alright, I spent the day at the Montreal General Hospital doing my routine post-operation follow-up which involves lumbar X-rays before seeing my spine surgeon to go over them.

Got there at 11:30 a.m. and was back home at 4:00 p.m. famished.

The hitch? Well, our services are deteriorating, there are more people putting strain on our healthcare system and today some machines broke down and the radiology technicians (God bless them) were very short-staffed.

The good news is super wealthy Canadians are going to pay more in capital gains taxes and save our healthcare and economic malaise in one fell swoop!

Of course, I'm being sarcastic, this country is going down the tubes fast and if you want to read some real insights on why increasing the capital gains tax is wrong, read my post on LinkedIn from this morning or just read Barbara Shecter's article on how it could lead to 'brain drain,' harm productivity as some fear tech exodus.

There are plenty more articles that expose how detrimental this tax increase will be but the federal government doesn't care, just like it doesn't care how detrimental the carbon tax is to Alberta and the rest of the country (you'll remember this next time you go fill up your car).

Anyways, don't get me started but there are a lot of politicians in our federal government who need to take a course in basic economics because they're completely clueless and sending this country back decades.

Alright, back to that CPP Investments meeting in Calgary.

I bet you Michel Leduc and his team were happy to see such a massive turnout.

Pensions aren't exactly a sexy topic, you're not going to have some guy like Anthony Robbins giving you his secrets for success while he dazzles you with his sparkling bleached white teeth and dynamic energy (again, more sarcasm).

No, pensions are boring and they're meant to be boring, consistently generating decent risk-adjusted returns over the long run to ensure we have generational wealth built up so future generations can retire in dignity and security.

In short, pensions aren't about beating the Nasdaq or putting all your eggs in the Magnificent Seven stocks, it's about ensuring you have enough assets to meet your future liabilities and never sustain a massive hit that jeopardizes your ability to deliver on the pension promise.

Last week, John Graham, President and CEO of CPP Investments wrote a comment on a national pension promise which I covered here.

Our national pension fund is doing extremely well, it's managed properly and has some of the very best governance standards in the world allowing them to manage more assets internally to lower costs and to properly diversify across the world across public and private markets.

In short, we don't need to meddle with CPP Investments and while I welcome discussions on how our large pension funds can invest more domestically, I think we really need to be careful about imposing anything on the way they manage their assets and operations.

Can we improve their governance? Sure, you bet, governance isn't etched in stone, you can always improve on all elements of pension governance: asset management, oversight, board evaluations, risk management, strategic planning, communications, plan administration, actuarial evaluations, etc.

My recommendation is to always be transparent and properly communicate your operations.

On this front, CPP Investments sets the standard, mostly owing to its legislation which forces them to be transparent and communicate often all over Canada but also because it's just part of their beliefs and the way they operate.

So, you bet a lot of Albertans aren't keen about leaving the Canada Pension Plan, they're very happy with what they have and don't want to opt out.

I've said this before and I'll say it again, this whole Alberta Pension Plan brouhaha was a  reaction to Trudeau's asinine carbon tax, it will not happen, and I while I understand why Premier Danielle Smith dangled the idea, it's now time to lay it to rest and move on (they are quietly walking it back).

Premier Smith is actually a very sharp politician, she is running the province extremely well which is why Alberta is doing well but she has to contend with Justin and Chrystia at the federal level as do other premiers.

Not easy and the more I hear her talk, the more impressed I am with her and think I was too harsh on her and her government when this whole Alberta Pension Plan idea initially came out.

The CPP is doing well, we are much stronger as a country when our retirement system is doing well and Canadians need to learn more about how they can get more out of retirement.

I'm glad Albertans showed up in high numbers at that meeting Michel Leduc and his colleagues were hosting, they had a lot of questions that were answered and those that were not will be answered by email.

This is what being part of a well-functioning democracy is all about.

Now remind me when Quebec's health minister is going to host town hall meetings on our healthcare system so I can go give him and his staff an earful on how shameful and unacceptable it is to make someone wait all day at the hospital for a five minute X-ray. Totally insane!  

"Don't worry, Leo, the Liberals are on it, more taxes to support more spending, who cares if our services are going down the tubes and the brain drain continues. Taxes are the cure all!"

Unfortunately, they're not and the flip side of more taxes is transparency and accountability

The federal government is demanding more transparency from our large pensions as to where they invest which is fine but it would be nice if our federal government led by example, providing Canadians with a detailed breakdown of all the spending going on at the federal level (they have a central registry and can easily provide details across departments and Crown corps but choose not to do so).

Anyway, I'm tired, wanted to cover the meeting that took place this week as Albertans deserve transparency and proper information if they are to vote on opting out of the CPP (which I still maintain is a terrible idea).

Below, CTV Calgary reports there was particular interest heading into the Canada Pension Plan Investment Board's Tuesday night town hall at the BMO Centre.

Things haven't been this exciting at a CPP Investments public meeting in a very long time! :)