I am writing in response to comments made by Greg Neiman in his editorial, Can CPP be sustained?
Neiman states that the money in the CPP can’t last for the next generation of retirees, and he worries about how the next generation of under-employed workers is going to support the CPP.
Neiman shares a common misconception about the ability of the CPP to meet its obligations to Canadians in the years to come.
In fact, thanks to reforms in the mid-1990s, the CPP is secure for generations to come.
The chief actuary of Canada reconfirmed earlier this month that the CPP is sustainable, at current contribution and payout rates, for the 75-year time frame of his report.
That calculation takes into account the large number of retiring baby boomers, the increasing longevity of Canadians and the fact that there will be fewer workers in the future to support retirees’ benefits.
The CPP investment board invests the funds that are not needed to pay current benefits. It currently has assets of $138 billion, which are projected to grow to approximately $465 billion in the next two decades.
It will be 11 years before even a small portion of the fund’s investment income will be required to help pay pension benefits.
Canadians can be assured that the CPP will remain the foundation of their retirement security.
Linda Sims
Director, media relations
CPP investment board