Do you know where you’ll live after you retire?
Some people do. They’ve laid their plans and maybe even bought their retirement home or condo. But for many, retirement plans are fluid – or just viewed as a long way off.
For those whose retirement plans aren’t set in stone, the option to take pension funds, like the CPP, anywhere in Canada or the world is important. It’s convenient, it means freedom, it means you don’t have to worry.
CPP was designed from the start to be taken anywhere by Canada’s retirees. Whether you’ve spent a lifetime working in one province or have lived all over this land, you can rest easy knowing that the foundation for your retirement savings will go wherever you do.
CPP was also designed to be secure and has provided retirement benefits to millions of Canadians since 1966.
By depending on contributions from Canadian workers and their employers across the country, CPP has avoided a lot of the risks that come from relying too much on the financial fortunes of any one province.
And, if this past year of dealing with the pandemic has taught us anything, it’s that we can’t predict the future. When times get uncertain, there’s safety in numbers and Canadians do best when they work together.
Speaking of numbers, all CPP contributions that aren’t used to pay benefits right away are invested and earn returns to help make sure that your benefits, and those of your fellow Canadians, will be there when you need them.
To help keep the CPP Fund sound, professional financial managers at CPP Investments take a long-term approach, carefully choosing investments that can produce steady returns to help fund the CPP for generations.
The law creating CPP Investments gave those managers a clear job: to maximize investment returns without taking too much risk. That law also makes it clear that politicians can’t interfere with those investments.
Over the past 10 years, the managers at CPP Investments have overseen an average annual return of more than 10% after all costs are deducted. That’s better than most pension funds around the world. And that strong investment performance helps keep the contribution rates paid by Canadian workers, and their employers, level.
CPP Investments earns those returns by investing around the world, and here at home, in real estate, new medicines and vaccines, toll roads, utilities and more. And, of course, they invest in the energy sector, including wind, solar and new technologies that capture carbon emissions.
Spreading out where we invest, and what we invest in, is key to our long-term approach that helps make sure the Fund will be there for your retirement – and for your children and grandchildren too.
Every three years, the Office of the Chief Actuary of Canada (OCA) conducts an independent review on the sustainability of the CPP over the next 75 years. In the most recent triennial review published in December 2019, the Chief Actuary reaffirmed that, as at December 31, 2018, both the base and additional CPP continue to be sustainable over the 75-year projection period at the legislated contribution rates.
The Chief Actuary’s projections assume that, over the 75 years following 2018, the base CPP account will earn an average annual rate of return of 3.95% above the rate of Canadian consumer price inflation. The corresponding assumption is that the additional CPP account will earn an average annual real rate of return of 3.38%.
CPP Investments, Investing today for your tomorrow.