64% of Canadians don’t think CPP will be there when they retire, and it’s no surprise—aging populations, rising costs, and even talk of Alberta leaving CPP can fuel that worry. But here’s the good news: CPP is more secure than you think.
Reason #1. The CPP Has Outperformed Expectations
In the fiscal year ending March 31, 2024, CPP Investments reported a net income of $46.4 billion with a return of 8.0%, pushing the fund’s total assets to $632.3 billion. This total asset amount is well beyond what was initially expected.
Take a look at this chart comparing actual CPP assets with earlier projections. It’s a huge deal because it shows just how much the fund has outperformed expectations. Back when projections were made in the year 2000, the CPP was expected to have $425 billion by 2023. Instead, the fund reached $632 billion in 2023, exceeding projections by more than $150 billion.
Why Is This So Important?
This isn’t just a random surplus—it’s a direct reflection of smart investment strategies. The fact that the CPP has grown so much faster than anticipated shows that the fund managers are likely making sound, long-term decisions. Even during challenging economic times, like the 2008 financial crisis and the COVID-19 pandemic, the CPP Fund has remained resilient and continued to grow.
This kind of growth matters because it ensures that the CPP can easily handle today’s growing number of retirees.
In simple terms: the CPP is in great financial shape, way beyond what anyone predicted a couple of decades ago. This kind of financial performance should help give Canadians peace of mind, knowing that their retirement benefits will likely be there when they need them.
Reason #2. Sustainability for Generations
When we talk about the future of the Canada Pension Plan (CPP), it’s not just about whether it’s in good shape right now—it’s about ensuring that future generations are taken care of too.
Every three years, the Chief Actuary of Canada takes a detailed look at the CPP’s financial health, and the latest report shows that the CPP is on solid ground for at least the next 75 years.
Let’s Break Down the Numbers:
Right now, the CPP Fund is already massive, sitting at $632 billion. But what’s even more impressive is how much it’s projected to grow.
Here is another chart that outlines the projected growth of CPP assets over time:
- By 2030, the fund is expected to reach around $1.5 trillion—more than doubling its current size.
- By 2040, the assets are projected to rise to nearly $2.5 trillion, continuing its strong growth trajectory.
- By 2050, the fund is expected to hit an astounding $3.6 trillion.
What Does This Mean for You?
These projections are not just impressive—they show the long-term sustainability of the CPP. The fund’s expected growth means that it is well-positioned to support today’s retirees, as well as future generations of Canadians. According to the projections, the CPP is likely to remain financially stable for at least 75 years, which means it will likely be solvent headed into the 22nd century.
Whether you’re approaching retirement or have many years to go, these forecasts help provide reassurance that the CPP is on a solid path.
Think of the CPP as a growing tree. Each generation contributes to its roots, while the future generations enjoy the fruits, with the tree getting stronger year after year.
Quick side note: if you’re unsure about when to start your CPP, check out our video ‘CPP Mistakes to Avoid’—a great follow-up after this one.
Reason #3. Trustworthiness of the reporting
It’s natural to ask: Can we trust the (CPP) reports and audits? With all the numbers I’ve shared from the report, how do we really know they’re accurate? It’s a fair concern, especially when we think back to scandals like Enron, which also had audits, yet still collapsed. But the CPP has safeguards in place that make a huge difference.
First, the Chief Actuary of Canada handles the audits, providing an impartial assessment of the CPP’s long-term financial health. The Chief Actuary operates independently from political influence and sees that the reports are accurate and free from external pressure. The most recent 31st Actuarial Report, completed in 2022, confirmed the CPP’s sustainability for at least 75 years.
Beyond that, the Parliamentary Budget Officer (PBO) steps in to review these reports, adding another layer of independent scrutiny. The PBO is known for being independent, transparent, and non-partisan, which makes them a reliable source of oversight. Their main role is to provide objective, factual analysis, and ensure that the financial data is trustworthy and unbiased.
Further assurance comes from external audits. For example, Deloitte’s 2022 audit confirmed that CPP Investments maintained effective internal control over financial reporting, reinforcing trust in the system
So, with both the Chief Actuary and the PBO providing independent oversight, and external audits confirming the findings, there’s strong reason to trust the accuracy and transparency of the CPP reports.
Here’s a summary of the layers of financial reporting for these reporting standards:
| Entity | Role |
| Chief Actuary | Assesses CPP’s long-term sustainability |
| Parliamentary Budget Officer (PBO) | Provides independent review of the reports |
| Deloitte (External Auditor) | Audits financial reporting |
Could there potentially be a vast government conspiracy that could trigger audit failures? Sure, anything is possible, but given the multiple layers of scrutiny and transparency, the CPP is one of the most reliable and well-monitored funds out there. While it’s wise to be cautious about financial audits, based on all of this, I choose to trust the results of the CPP reports.
What Does This Mean for You?
For the average Canadian, the trustworthiness of the CPP’s reports means peace of mind. The system is built to last, with safeguards in place to ensure its long-term sustainability.
Knowing that the CPP is reviewed by multiple independent bodies, audited thoroughly, and currently projected to last at least 75 years means you don’t have to worry about it running out of money.
Pro Tip: Always look for independent audits or third-party reviews when evaluating financial reports, whether it’s for a pension fund like this, or a company you want to invest in. It’s key to making informed decisions with trust.
Reason #4: Investment Performance and Management
The investment performance and management of CPP Investments is a key to its long-term success. Let’s take a closer look at how it’s managed and highlight both the strengths and areas to watch.
1. Strong Long-Term Returns
CPP Investments delivered a 10-year net nominal return of 9.2% per year, and a 5-year net nominal return of 7.7% per year. This performance has pushed the fund’s assets to $632.3 billion by March 31, 2024, surpassing projections by over $150 billion. The fund’s ability to outperform expectations in the long run shows the success of its investment strategy.
2. Diversified Global Portfolio
The fund is globally diversified across 56 countries, investing in public and private equities, infrastructure, real estate, and fixed income. With only 12% of the portfolio invested in Canada, the rest is spread across international markets, which helps reduce risk by avoiding heavy reliance on any single economy.
This shows provides a breakdown of the geographic distribution of CPP’s assets, demonstrating how a global approach enhances the fund’s stability.
3. Active Management Strategy
CPP Investments employs an active management approach to achieve incremental returns by investing in areas such as infrastructure, real estate, and private equity. This strategy aims to outperform passive approaches over the long term, though it will also underperform in certain years.
For instance, while CPP’s 8.0% net return for fiscal 2024 is strong, it fell way short compared to the Reference Portfolio’s 19.9% return. Not a great performance, but it’s bound to happen in some years of active management.
However, for a pension fund like CPP, active management is essential to address the complexities of pension payouts and actuarial needs. Rather than focusing on a single year of returns, it’s more important to consider the bigger picture—CPP’s assets have grown significantly, reaching $632 billion, well above projections. To me, the fact that the pension is well-funded shows that the investment management has been sound.
CPP is Canada’s reliable retirement backbone, and our team at Blueprint Financial can help you leverage it for a secure future. We’ll help you figure out those tough problems, like at what age to start taking CPP and OAS when you retire. See our services for personalized planning!
