Chief Actuary Confirms Canada Pension Plan Is Solid, and Sustainable Over the Long Term
October 28, 2016 – Ottawa, Ontario – Department of Finance Canada
Middle class Canadians are working harder than ever, but many are worried that they won’t have enough put away for their retirement. One in four families approaching retirement—1.1 million families—are at risk of not saving enough. That is why a stronger Canada Pension Plan (CPP) is a key part of the promise that the Government of Canada made to Canadians to help the middle class and those working hard to join it.
Today, Minister of Finance Bill Morneau tabled the Chief Actuary’s 28th Actuarial Report on the CPP in Parliament. The report confirms that the contribution and benefit levels proposed under the CPP enhancement agreed upon by Canada’s governments on June 20, 2016 will be sustainable over the long term, ensuring that Canadian workers can count on an even stronger, secure CPP for years to come.
On October 6, 2016, the Government of Canada delivered on its commitment to a stronger CPP with the introduction of legislation in Parliament to implement the agreement reached by Canada’s governments to enhance the CPP to give Canadians a stronger public pension that will help them retire in dignity.
“This report confirms that future generations of Canadians can be confident that there will be more money from the CPP waiting for them when they retire, so they can focus on the things that matter—like spending time with their family—rather than on worrying about making ends meet. I would like to thank Chief Actuary Jean-Claude Ménard and his staff for their hard work in helping to ensure a financially sustainable CPP for hard-working Canadians.”
- Bill Morneau, Minister of Finance
- When legislation affecting CPP benefits or contributions is introduced in Parliament, the Chief Actuary of Canada is required to prepare an actuarial assessment of the proposed changes.
- Once fully phased in, the CPP enhancement will increase CPP benefits by as much as 50 per cent.
- The CPP provides a secure, predictable benefit, which means that Canadians can worry less about outliving their savings, or having their savings impacted by significant market downturns.
- CPP benefits are fully indexed to prices, which reduces the risk that inflation will gradually erode the purchasing power of retirement savings.
- The CPP is a good solution for Canada’s changing job market. It helps to fill the gap left by declining workplace pension coverage, and it is portable across jobs and provinces, which promotes labour mobility.
- The CPP is a large program with millions of contributors, which allows the CPP Investment Board to take advantage of economies of scale in order to deliver strong net returns.
- With the automatic collection of contributions for all workers, the CPP is a simple way to save.
- The 28th Actuarial Report on the Canada Pension Plan confirms the long-term sustainability of CPP contribution and benefit levels included in Bill C-26. Once the CPP enhancement is mature, fully funded enhanced CPP benefits will be financed by contributions from workers (15 per cent) and employers (15 per cent) and by investment income (70 per cent).
- Government Introduces Legislation for a Stronger Canada Pension Plan and a More Secure Retirement for Canadians
- Canadians Can Count on a Stronger, Financially Sustainable Canada Pension Plan
Office of the Minister of Finance
Department of Finance Canada