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The Canada Pension Plan (CPP) launched in 1966 and pays retirees a monthly amount based on contributions deducted from their paycheques throughout their working lives. "You contribute with the understanding that when it comes your time to retire, you can expect your own steady stream of income where the risks are being managed directly by the plan," says Prof. Sebastien Betermier听in interviews with the CBC.听Both employers and employees contribute to the plan, except in Quebec, where a separate provincial pension plan was launched at the same time as the federal one. Alberta鈥檚 provincial government recently made headlines when it published a report that it was entitled to more than half of the $575 million fund, if it chose to withdraw from the plan. Alberta might want to think twice before withdrawing, as the CPP has been ranked as one of the best-managed pension funds in the world, and achieved annualized returns of nearly 10% over the past decade.听

Betermier also shares his thoughts on Alberta鈥檚 potential pension plan with Benefits and Pension Monitor, exploring the impact that this would have on Canada and the CPP. The greatest threat, he says, is if, ultimately, the provinces do not deem the capital allocation to be fair and other provinces jump on the bandwagon and also potentially try to secede, resulting in a lose of consensus among the provinces that could lead to the demise of the CPP in its entirety. "That would be, in my view, a very bad scenario because we have, through the coordination of the provinces, a great system and one that Canadian should be proud of."

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