Alberta's Potential Exit from Canada Pension Plan Sparks Controversy; Finance Minister Warns of Financial Risk

Alberta's Proposed Withdrawal from the Canada Pension Plan Raises Financial Stability Concerns and Cites Disputed Value Calculations; Expected to Face Referendum in 2025.

• Canadian Finance Minister Chrystia Freeland has warned that Alberta's potential withdrawal from the Canada Pension Plan (CPP) would risk the retirements of millions and could be an irreversible mistake.
• Alberta Premier Danielle Smith argues that a new pension plan would yield larger retirement payments and lower premiums. A report commissioned by her government has suggested Alberta should receive 53% of CPP assets, a claim that has been disputed by CPP Investments.
• CPP Investments, managing assets for over 21 million Canadians, has grown its assets from C$36 billion to over C$570 billion in 20 years, with a 10-year return outperforming any pension fund in the world during that period.
• Alberta's proposed withdrawal will go through consultation until May 2024, with a potential referendum in 2025. However, there are concerns about the types of pension questions that may appear in the referendum that could complicate the outcome.
• If Alberta fails to reach an agreement on asset transference prior to the referendum, either political negotiation or legal action will be needed. If it walked away with 53% of assets, CPP contributions from other provinces would have to increase, potentially destabilizing the fund

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