[Fuzz]

This is a really good explanation from pension experts on the CPP/proposed APP and details why the plan is pretty dumb. Highly recommend reading the whole thing, it covers lots of areas.

The Canada Pension Plan legislation permits a province to withdraw from the plan if it sets up an equivalent plan. Under the CPP legislation, an Alberta plan would inherit liabilities for all benefits workers earned while working in Alberta since 1966. Because so many Canadians have moved into and out of Alberta since then, determining Alberta’s liabilities would not be easy.

In summary, liabilities and the unfunded liabilities assumed by an APP would be considerably larger than proponents of an APP seem to have contemplated.

Proponents of Alberta’s withdrawal from CPP have suggested that Alberta could persuade the federal and other provincial governments to strike a better deal than what would result from the legal requirements outlined above for transferring assets and liabilities. This would require an amendment to the CPP legislation and that would require the agreement of 2/3 of the provinces representing 2/3 of the population and the federal governmental. It is unlikely that the provinces or the federal government would agree to make a better deal for a province leaving the CPP.

There is also a question of AIMCo’s independence from political interference. Alberta legislation, in addition to the sole authority to appoint AIMCo’s Board, gives the Alberta Government considerable powers over AIMCo. The government has shown that it is willing to use it. The current government has changed laws to deny pension plan boards the ability to leave AIMCo and make other investment arrangements if they so choose after giving due notice. It has also forced Teachers Retirement Fund Board to use AIMCo for investment purposes. These actions have impacted the relationship between AIMCo and large pension plans’ boards.

A duplicate bureaucracy would have to be set up to replace the one currently in place in the Government of Canada to administer the contributions and benefits. This would add costs at the outset, and could well be more expensive on an ongoing basis because of smaller scale. Such complex transitions are lengthy and error-prone. The annual cost of CPP administration (excluding investment costs) is about $780 million a year including the enhanced benefits portion. With a reasonable adjustment for lower economies of scale, Alberta could expect administration to cost more than an amount proportional to its number of contributors and pensioners. Pension expert Keith Ambachtsheer has estimated that total administration costs (not including investment costs) could be anywhere from $260 million to $525 million. Even his lowest estimate represents a significantly higher per-member cost.

Albertans could lose a lot. It’s not clear what they would gain. Over the years, CPP has been reformed, strengthened, and expanded. By all accounts, it is working well. Why would we walk away from that? Why would we leave a national plan where decisions are made through negotiations and agreement among the provinces and the federal government and where no single government of the day holds all the powers over the plan? Why expose ourselves to the risk that an Alberta government might someday declare the plan unaffordable and amend it to deliver a lower pension?

https://abpolecon.ca/2021/09/29/what...-to-albertans/

This looks like a giant expensive load of ####. It's like Brexit, but even dumber.