Have you ever wondered why you have a Social Insurance Number?
The Social Insurance Number (SIN) was actually introduced in 1964 to make it easier to administer unemployment benefits.
But the government soon found other uses for the numbering system that identifies individual Canadian residents and citizens: like making it simpler to administer Old Age Security payments and, later, Canada Pension Plan benefits.
The CPP (and its Quebec counterpart, QPP) was created in response to rising poverty rates among retired Canadians. The first payments from workers and their employers began going into the plan in 1966, and the first cheques to retirees and other beneficiaries were issued on January 1, 1967.
The 1997 reforms led to the creation of reserve funds, so the federal and provincial governments agreed to set up the CPP Investments to invest money that wasn’t being used immediately to pay benefits.
CPP Investments invests, worldwide, and the Fund is now valued at more than $400 billion. According to the Chief Actuary of Canada, CPP Investments’ work has helped ensure the CPP will be funded for at least 75 years.
Most recently, in 2016, federal and provincial governments introduced additional enhancements to expand CPP so that it will one day replace about 33% of average annual wages. To do that, it will raise how much working Canadians and their employers contribute each month by 2%.
These latest changes were sparked by concerns that fewer working Canadians had the benefit of workplace pension plans to supplement what they would get from government-run programs like CPP and OAS.
Millennials, members of Generation Z and those that come after, will likely benefit most from these reforms, which are designed to keep CPP front and centre to the way Canadians retire.
CPP Investments, Investing Today for Your Tomorrow.
The content on this site is provided for information purposes only. CPP Investments is not a financial advisor, and the content on this site does not provide financial advice. Every person’s financial planning needs are different. For advice on how you should prepare financially for retirement, please consult a credentialed professional financial advisor.