4 Common Questions About the Canada Pension Plan Fund, Answered

Concerned about your financial security? You’re not alone. Read on for answers to Canadians’ most common questions about the CPP Fund.

CPP - couple working out financesPhoto: Shutterstock

Given today’s uncertainty, it’s not unusual for Canadians to be concerned about their investments and future financial security. The CPP Fund is managed by CPP Investments with a clear mandate to invest the assets of the CPP Fund for maximum return without undue risk of loss.

Read on and take comfort knowing the CPP Fund is built for the long haul.

Will it run out before I am eligible to start receiving CPP?

Over 20 years ago, before the establishment of CPP Investments, the CPP Fund did have a problem. At that time, retirees were living longer, and not enough new people were joining the workforce to contribute to the CPP. More money was going out from the CPP than was coming in.

Several changes were made, including creating CPP Investments which has helped grow the CPP Fund from $39.9 billion to over $400 billion today. The most recent report by the Chief Actuary of Canada, released in December 2019, describes how the CPP Fund is expected to be sustainable for more than 75 years. 

Why aren’t CPP benefits higher?

The CPP isn’t meant to replace your entire income when you retire. It was designed to provide a base amount of income to give Canadians some peace of mind. It actually will replace up to about 25 percent of an average working Canadian’s income and recent changes mean that number will gradually move to 33 percent over time.

The exact amount you’ll receive depends on various factors, such as the age you start receiving the CPP, how much and for how long you contributed to the CPP, and your average earnings throughout your working life.[1] It’s a good idea to have other sources of income during retirement, such as a company pension, RRSPs, GICs, etc.

CPP - family savingsPhoto: Shutterstock

How stable are the assets CPP Investments selects?

The goal of CPP Investments is to deliver strong financial performance for generations to come. That’s why CPP Investments evaluates investments with long-term goals in mind. Of course, they also continue to stress test the portfolio, looking at investment outcomes under a variety of extreme scenarios, so that they can be confident the necessary funds will be available for future CPP benefits payments.

Why is CPP Investments not investing solely in Canada?

CPP Investments does invest in Canada – currently, 16 percent of total assets are Canadian investments. The rest of their investments are dispersed among international markets, including the United States, Latin America, Europe, Asia and Australia.

This geographic diversity is part of CPP Investments’ overall investment strategy. You’ve probably heard the common piece of advice: “Don’t put all your eggs in one basket.” It’s a little like that. By investing in over 40 countries, both developed and emerging, they avoid relying too heavily on any single market (including Canada). A global investment strategy allows for a well-balanced portfolio that will maximize returns in the long run, without incurring undue risk of loss.[2]

Learn more about CPP Investments.



This content is provided for information purposes only. CPP Investments is not a financial advisor and does not provide financial advice. Every person’s financial planning needs are different. For advice on how you should prepare financially for retirement, please consult a credentialed professional financial advisor.

[1] https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-benefit/amount.html

[2] https://www.cppinvestments.com/about-us/our-story