With the average age and lifespan of Canadians rising, proper planning and preparation for retirement is becoming increasingly important to our citizens and to our country.
The contributions-based Canada Pension Plan is one critical component of the overall retirement picture. Its sustainability – our confidence that the Fund will continue to contribute to Canadians’ retirement incomes for future generations, even in the face of economic fluctuations – is actively monitored by the Chief Actuary of Canada.
Every three years, the Chief Actuary issues a report that reviews the financial state of the Fund and measures its sustainability. The most recent report (2019) projected that CPP contributions to base CPP and additional CPP will exceed annual benefits paid until 2021 and 2057, respectively.
The Chief Actuary concluded that “despite the projected substantial increase in benefits paid as a result of an aging population, the Plan is expected to be able to meet its obligations throughout the projection period.”
CPP Investments’ sole focus is investing the assets of the CPP. To that end, we have built an organization capable of handling the tremendous growth of the Fund as it continues to increase over time.
Financial Sustainability of the CPP
The most recent triennial report by the Chief Actuary of Canada indicated that the CPP is sustainable over a 75-year projection period.
Projections of the Fund, being the combined assets of the base and additional CPP accounts, are based on the nominal projections from the 31st Actuarial Report on the Canada Pension Plan as at December 31, 2021.