The debate over Alberta leaving the Canada Pension Plan (CPP) to create its own Alberta Pension Plan (APP) has sparked intense discussion. Let’s break down the pros and cons of this proposal in a quick, digestible format.

Pros of an Alberta Pension Plan

Lower Contribution Rates
- APP contribution rates could drop to 5.91%, compared to the current CPP rate of 9.54%, resulting in significant savings.
- Workers earning at or above the Year’s Maximum Pensionable Earnings (YMPE) could save up to $1,425 annually, with employers matching this amount—totaling $2,850 per worker[1][3][9].

Higher Benefits for Seniors
- The estimated $5 billion annual savings could be used to enhance senior benefits, such as:
- A one-time retirement bonus of $5,000–$10,000.
- Increased monthly pensions beyond the CPP average of $760.07 or maximum of $1,306.57[3][4].

More Local Control
- An APP would be managed provincially, allowing Alberta to tailor pension policies to its unique demographic and economic conditions[2][3].

4.Asset Transfer Advantage
- Alberta claims it is entitled to 53% of CPP assets, or approximately $334 billion, which would provide a strong financial foundation for decades[1][3].

Business Competitiveness
- Lower employer contributions could free up funds for businesses to reinvest in growth, such as hiring more employees or purchasing equipment[3].

Demographic Advantage
- Alberta’s younger population and higher employment rates mean more contributors than beneficiaries, potentially ensuring long-term stability[3][4].

Cons of an Alberta Pension Plan

Feasibility Concerns
- Critics argue that Alberta’s claim to 53% of CPP assets is overstated. The actual entitlement may be closer to 16%, or about $100 billion, creating uncertainty about the APP’s financial foundation[1][7].

Economic Risks
- Alberta’s economy is heavily reliant on volatile industries like oil and gas. A downturn could strain the APP’s ability to maintain lower contribution rates and higher benefits[5][8].

Administrative Complexity
- Transitioning from CPP to APP would require significant administrative effort and legal agreements with other provinces to ensure portability of benefits for Albertans moving across Canada[6][9].

Potential Instability
- Smaller pension plans like the APP may lack the risk-pooling advantages of a national plan like the CPP, making them more vulnerable to demographic or economic shifts[8].

Public Opposition
- A recent poll found that 52% of Albertans view leaving the CPP as a “bad or very bad idea,” reflecting concerns over risks and uncertainties[7].

Impact on Other Canadians
- If Alberta exits the CPP, workers in other provinces may face higher contribution rates or reduced benefits due to the loss of Alberta’s contributions[1][7].

What About Old Age Security (OAS)?

OAS is a federal program funded through general tax revenues and would remain unaffected by Alberta’s move to an APP.
However, enhanced APP benefits could supplement OAS payments, improving retirement income for seniors in Alberta[2][4].

Final Thoughts

The decision to transition from the CPP to an APP is complex, with potential for significant savings but also considerable risks. While proponents highlight lower contributions and higher benefits, critics warn about economic volatility and feasibility concerns. Ultimately, Albertans will have their say in a referendum—a choice that will shape retirement security for generations.