FOR IMMEDIATE RELEASE: October 09, 1998
Don’t mess with workers’ retirement funds!
EDMONTON –The Alberta Chamber of Commerce is being reckless and irresponsible by suggesting that Alberta should pull out of the Canada Pension Plan (CPP), says the Alberta Federation of Labour. "CPP is the bedrock of a secure retirement for most working Albertans," says AFL president Audrey Cormack. "Pulling out of the system might serve the short-term interests of a small number of people in the business community. But it would certainly not be in the best interests of ordinary working people." Cormack’s comments came in response to statements made yesterday by senior members of the Alberta Chamber of Commerce. In a province-wide video conference, chamber members described the CPP as a "pyramid scheme" and called for a "made-in-Alberta" pension plan. "The Chamber has fundamentally misunderstood the nature of the CPP," says Cormack. "The CPP is a ‘pay-as-you-go’ system, in which working people pay directly for the benefits of retirees. This kind of system cannot go bankrupt as the Chamber is suggesting. The only way it can fail is if an entire generation of working people and their political leaders decide to abandon an entire generation of seniors. That kind of thing probably won’t happen here in Canada. But fear-mongering from organizations like the Chamber certainly won’t help." Cormack also criticized the logic of pulling out of a large national pension program like the CPP in order to establish a much smaller provincial program. She says pulling out would undermine the CPP in other provinces, thus weakening national unity. It would also put the pension incomes of thousands of Albertans at risk. "One of the great benefits of participating in a national program like CPP is that it protects the financial security of individuals," says Cormack. "The larger the group of people you have paying into the system, the more secure it is. If we tried to make a go of it on our own, we’d be more exposed to risk and, as a result, individual Albertans would probably have to pay higher premiums to get the same level of benefits. Either that, or we would have to make do with a significantly lower level of benefits." Cormack was particularly critical of Chamber members who want to replace the current "pay-as-you-go" system with a system in which individuals would be expected to make investments into personal RRSPs. Cormack says that most Canadians would be hurt by such a system – especially now that the national and international stock markets are tumbling. "Not everyone has the expertise or the extra money to make a fortune on the stock market," says Cormack. "The bottom line is that a ‘pay-as-you-go’ pension plan like the CPP is the best way to ensure a minimum standard of income for retired Canadians. It may not provide seniors with the kind of huge payouts that some people have earned on the stock markets over the past few years – but it will certainly provide security. And now that the world economy seems to heading into another major downturn, security is exactly what most Canadians are looking for."
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