John Major has been appointed by Speaker Ken Kowalski to undertake the review, which could take up to four months.
Major has also served on the Alberta Court of Appeal, and headed an inquiry into the bombing of Air India Flight 182.
Kowalski was directed to set up the inquiry by Premier Alison Redford.
During her recent successful campaign for the party leadership, Redford promised a review into pay and perks for politicians.
The issue became a lightning rod of controversy after former premier Ed Stelmach ordered up 30 to 34 per cent raises for himself and his cabinet after the 2008 general election.Suggest a correction