About Us
CPP Investments is a global investment management organization that invests the Canada Pension Plan (CPP) to help ensure the CPP remains sustainable for the long term. CPP Investments is a Crown Corporation that operates independently of government; its sole aim is to invest the funds and maximize results without undue risk.
The Canada Pension Plan (CPP) meanwhile is a social insurance plan that is funded by the contributions of employees, employers and self-employed people as well as the revenue earned on investments. CPP is administered by Economic and Social Development Canada, a department of the federal government. The CPP covers virtually all employed and self-employed people in Canada, excluding Quebec, which operates its own comprehensive plan, the Quebec Pension Plan.
The Old Age Security (OAS) pension is a monthly payment you can get if you are 65 and older. It is a federal government program funded by general tax revenue.
Canada Pension Plan Investment Board (CPP Investments) was created in 1997 by an Act of Parliament to respond to projections that the employee contributions to pay retirements benefits was not sustainable.
It was determined that a professional investment management organization would be able to grow the fund through investment income to help ensure the CPP remains sustainable for the long term. CPP Investments prudently invests the amounts transferred to us by the CPP, helping to provide a foundation on which Canadians can build financial security in retirement.
After an initial transfer of $12.1 million from the CPP, we began investing in publicly traded stocks in 1999.
To learn more about our mandate and structure, visit About Us.
Yes. CPP Investments operates at arm’s length from federal and provincial governments with the oversight of an independent, highly qualified professional Board of Directors. The Canada Pension Plan Investment Board Act (CPPIB Act) has safeguards against any political interference. All assets managed by CPP Investments are strictly segregated from government funds. CPP Investments management reports not to governments, but to the CPP Investments Board of Directors.
We are accountable to Parliament and to federal and provincial ministers who serve as the CPP stewards. The CPPIB Act holds our Board of Directors and Management accountable for their performance under a rigorous public accountability regime. We also go beyond our legislated requirements and make every effort to ensure federal and provincial stewards, as well as Canadians, are kept informed of our activities.
Yes. The CPP is projected to be financially sustainable for at least the next 75 years.
Every three years, the Office of the Chief Actuary of Canada, an independent federal body that provides checks and balances on the future costs of the CPP, evaluates the financial sustainability of the CPP over a long period. In December 2022, the Office of the Chief Actuary reaffirmed that each part of the CPP remains sustainable at the legislated contribution rates throughout the 75-year period (i.e., until 2100), based on actuarially accepted assumptions. This is the minimum review period as set out in CPP legislation.
This review takes many factors into account, including:
- The growing base of contributors and employment earnings;
- The rising ratio of those receiving pension benefits relative to contributors; and
- Expected increases in life expectancy.
The next actuarial review will cover the status of the CPP as at December 31, 2024, and will be next performed in 2025.
To find out more about CPP contributions and benefits, please visit the Service Canada website or call 1-800-277-9914 (Canada and the United States toll-free) or 1-613-957-1954 (call collect) outside of Canada and the United States as Service Canada manages the administration of the CPP program.
Other useful government resources:
Employment and Social Development Canada/ Service Canada
Canada Pension Plan Overview
Canada Pension Plan Contact Information
Canadian Retirement Income Calculator
Canada Pension Plan enhancement
Department of Finance Canada – Additional CPP
Backgrounder: Canada Pension Plan (CPP) Enhancement
Backgrounder: A Stronger Canada Pension Plan
Canada Revenue Agency
Canada Pension Plan (CPP)
The Canada Pension Plan enhancement
Our Investments
Our active management investment strategy is designed to deliver a well-balanced and globally diversified portfolio that will maximize sustained long-term returns without incurring undue risk. Our performance is driven by a long horizon and global scale so we can pursue investment strategies others cannot. Our unique mandate, talented global team, distinctive culture, and strong global brand further sets us apart.
With this approach we’re able to achieve an effective balance of risks and returns while seeking to add significant value through active management. Our goal is to achieve sustainable returns over the long term in the best interests of our contributors and beneficiaries.
As a result of our active management approach, our returns are exceeding expectations:
- When CPP Investments was first created, it was projected that the Fund would earn $256 billion in investment income and grow to $368 billion at the end of 2022.
- At $570 billion, the Fund has surpassed original projections by more than $200 billion in part due to $386 billion in investment income earned over that period.
To learn more, visit How We Invest and read Our Investments Beliefs.
CPP Investments is focused on delivering returns over a very long horizon and as such, we construct a portfolio that is diversified by both assets and geography.
We invest around the world to secure and manage public and private assets to maximize returns and deliver sustainable value. We have global teams who bring deep expertise and local knowledge. Our diversified investment portfolio is designed to be resilient to single-market volatility and to safeguard the best interests of current and future beneficiaries against other factors affecting the funding of the plan.
Our current asset mix (as of March 31, 2023) is as follows:
1 Fixed income consists of cash and cash equivalents, money market securities and government bonds, all net of financing liabilities. Public Equities include absolute return strategies and related investment liabilities.
2 As at March 31, 2023, the Real Assets investment department managed $52 billion of real estate, $52 billion of infrastructure and $32 billion of our private equity investments associated with sustainable energies. Collectively, these holdings represented 24% of net assets.
3 Credit consists of public and private credit investments of which $52 billion forms part of the Active Portfolio and $20 billion forms part of the Balancing Portfolio as at March 31, 2023, both managed by the Credit Investments department.
Our geographic mix (as of March 31, 2023) is as follows:
As a global investment organization, we invest in public equities, private equities, bonds, public and private debt, real estate, infrastructure and other areas. We regularly communicate about new investments and quarterly financial reporting, and disclose our investments on our website, and our public equities on an annual basis at year-end (March 31).
You can read about our holdings in the following lists:
- Private equity relationships established as at December 31, 2022
To learn more about our private equity investments and teams, please visit Private Equity. - Canadian public equity holdings as at March 31, 2023
- Foreign public equity holdings as at March 31, 2023
To learn more about our public market investment activities please visit Active Equities and Capital Markets & Factors Investing. - Global Equity Index Exposure as at March 31, 2023
- Real estate holdings established as at March 31, 2023
To learn more about our real estate activities and the teams who manage our investments, please visit Real Assets.
Please note that, as our disclosure policy states, we “do not disclose information regarding investments under consideration or not completed, and we respect third-party confidentiality agreements.” We also do not publish information that is commercially sensitive.
Canada is a core market for the Fund and we continue to make meaningful investments in Canada. Although Canada makes up less than 3% of global GDP, we have 14% of the Fund, or $83 billion, invested here (as at March 31, 2023). For a globally diversified institutional investor, this allocation is a significant portion of the whole portfolio.
Global diversification of the Fund is critical to help sustain the future pensions of more than 21 million CPP contributors and beneficiaries. A Fund of our size cannot be overly dependent on the strength of the Canadian economy and so we systematically look for opportunities to diversify internationally. Portfolio diversification by asset class and by geography is a fundamental part of CPP Investments’ long-term investment strategy.
CPP Investments considers Fund performance in the context of both returns required to ultimately pay pension benefits and our objective to achieve outperformance. Our absolute performance reporting shows the returns the Fund earned over one, five and 10-year time horizons. Our relative performance evaluates the Fund’s returns in the context of our benchmarks.
Our Reference Portfolios represent benchmarks of passive public investments that the Fund might hold as an alternative to actively investing. The Reference Portfolios differ between the additional CPP and base CPP accounts to reflect the different risk levels prudently targeted for each of their long-term investment portfolios. For the base CPP, CPP Investments has adopted a Reference Portfolio of 85% global equity/15% nominal bonds issued by Canadian governments. For the additional CPP account, CPP Investments has adopted a Reference Portfolio of 50% global equity/50% nominal bonds issued by Canadian governments.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability between market participants on a specific date.
Quoted market prices are used to measure the fair value for investments traded in an active market, such as public equities and marketable bonds.
Where the market for an investment is not active, such as for private equity, private debt, real assets, and over-the-counter derivatives, fair value is determined by valuation techniques that make maximum use of inputs observed from markets, such as a multiple of earnings derived from a set of publicly traded comparable companies.
Additional techniques include the use of recent arm’s-length transactions, the current fair value of another investment that is substantially the same, discounted cash-flow analysis, pricing models and other accepted industry valuation methods.
There are two parts to the Canada Pension Plan – the base CPP and the additional CPP. Federal and provincial governments decided in 2016 to expand the CPP to provide enhanced future benefits for workers who contribute. As part of this amendment, the CPP was expanded into two parts:
- The “base” CPP refers to the portion of benefits and contributions continuing at the rates used before January 2019; and
- The “additional” CPP refers to the additional benefits and the additional contributions that started in January 2019.
In coming decades, this means that CPP will replace approximately one-third of a beneficiary’s income compared to the previous level of approximately one-quarter, up to a certain limit.
Both the base CPP and additional CPP will have the full advantage of CPP Investments’ global network, expertise, investment strategies and risk governance framework. CPP Investments’ strategy is to build a single, resilient Fund with a view to strong performance for both accounts.
We generally do not respond to unsolicited investment proposals. To build a diversified portfolio, CPP Investments invests in public equities, private equities, real estate, infrastructure and fixed income instruments, and we explore investment opportunities that meet our criteria and scale. You can learn more about How We Invest and Our Investment Strategy here.
Sustainable Investing
Sustainability-related factors, including climate change, are increasingly and more directly impacting the strategic, operational and financial profile of companies around the world.
We believe organizations that effectively anticipate and manage dynamic and emerging material business risks and opportunities, including climate change, are more likely to make better-informed decisions, and endure and create value over the long term.
This is why we consider and integrate these sustainability-elated risks and opportunities into our investment analysis across the investment life cycle and across asset classes, where such considerations are material. This includes engaging with our investment partners and portfolio companies to promote improved management of these factors to enhance long-term outcomes in the companies and assets in which we invest.
CPP Investments is an active and engaged owner, and is constructive in our partnership with companies on their sustainability journey. We recognize and respect the different roles that shareholders/owners, boards/ directors and management teams/executives each play in ensuring long-term value creation.
Please visit the Sustainable Investing section of our website to learn more about our approach to sustainability.
Interested in our approach to net zero? Click to learn more about our net-zero commitment and how we are investing in the path to net zero.
We believe that the performance of our portfolio will be influenced by how well it adapts alongside the global economy on the path to net zero. As such, we believe stewarding the portfolio to net zero is in the best interests of the contributors and beneficiaries of the Canada Pension Plan and meeting our mandate. We commit our portfolio and operations to being net zero of GHG emissions across all scopes by 2050.
Learn more about our net-zero commitment and how we are investing in the path to net zero.
Governance & Operations
The nomination process to CPP Investments’ Board of Directors is designed to ensure that only those with appropriate and desired expertise, most generally in investment, business, and finance, are appointed to the Board.
The nomination process to CPP Investments is a well-defined and multi-step nomination and appointment process. Directors are appointed by the Governor in Council following a recommendation by the federal Minister of Finance. Before making that recommendation, the federal Minister is required to consult with the Finance Ministers of the participating provinces.
The Minister of Finance of Canada is authorized to appoint—and in practice has appointed—a nominating committee to advise on appointments, which consists of representatives of each of the participating provinces and a representative designated by the federal Minister. Under the supervision of the Governance Committee of the Board of Directors, a search firm is engaged and CPP Investments proposes individuals to the governmental nominating committee. The nominating committee then recommends candidates for appointment and re-appointment to the federal Finance Minister.
The Board posts a Notice of Appointment Opportunity on CPP Investments’ website. This provides the general public with the opportunity to view the critical competences required of a Director and to submit one’s name for consideration. Candidates arising from this process augment those identified by external executive search firms to ensure we consider the widest possible range of highly qualified candidates.
For more information see Board of Directors.
We compete for talent with the largest investment managers and financial institutions in Canada and around the world. We believe market competitive compensation is one of the essential elements necessary to attract, motivate and retain the talent we need to effectively execute CPP Investments’ legislative mandate.
Our compensation program reflects our public accountability and our responsibility to manage the Fund in the best interests of CPP’s contributors and beneficiaries. We align incentives to the delivery of our mandate and long-term strategy, while also considering our appetite for taking on different types of risks in our pursuit of value-add returns.
Our compensation approach considers Fund performance in the context of both returns required to ultimately pay pension benefits and our objective to achieve outperformance. Incorporating both absolute and relative Fund performance into our compensation framework helps draw a closer linkage between the interests of CPP contributors and beneficiaries and the compensation outcomes of our employees. As our investment strategy and execution evolve, we consider both quantity and quality when evaluating investment performance and other objectives.
Discipline in cost management is a main thrust of our public accountability as we continue to build an internationally competitive enterprise to create enduring value for multiple generations of beneficiaries of the CPP.
Overall, total expenses for the fiscal year ended March 31, 2023 increased compared to the previous year. Operating expenses increased by $112 million due to an increase in full-time globally positioned talent, continuous improvements to our technology and data infrastructure, and the development of our investment science capabilities. Our operating expense ratio was 28.6 basis points (bps), which is below the five-year average of 29.0 bps and up marginally from 27.1 bps observed in fiscal 2022.
For a full discussion of how we manage costs, please refer to our most recent Annual Report.
