OSFI Publishes 31st Actuarial Report on the Canada Pension Plan

The Office of the Superintendent of Financial Institutions (OSFI) released the results of the 31st Actuarial Report on the Canada Pension Plan (CPP), prepared based on the valuation date of December 31, 2021. The purpose of the report is to inform contributors and beneficiaries of the current and projected financial states of the base and additional CPP and provide information to evaluate the financial sustainability of the base and additional Plans over a long period, assuming that legislation remains unchanged.

The report's main findings for the Base CPP are on the topics of Contributions, Expenditures, Assets, and Minimum Contribution Rates needed to sustain the CPP. In addition, the report identifies uncertainties: Rate of Return Assumptions, Intervaluation Investment Experience, Mortality Assumption and Economic Growth.

Contributions

• Legislated contribution rate of 9.9% for year 2022 and thereafter.
• The number of CPP contributors expected to grow from 15.2 million in 2022 to 19.3 million in 2050.
• Contributions expected to increase from $61 billion in 2022 to $177 billion in 2050.   
• Contributions projected to be higher than expenditures up to the year 2025 inclusive.

Expenditures

• The number of retirement beneficiaries expected to increase from 6.0 million in 2022 to 9.9 million in 2050.
• Total expenditures projected to grow from $56 billion in 2022 to $197 billion in 2050.

Assets

• Total assets projected to grow from $544 billion at the end of 2021 to $791 billion by 2030 and $2.2 trillion by 2050.
• In 2050, investment income is projected to represent 42% of revenues.

Minimum Contribution Rates Need to Sustain the CPP

• The minimum contribution rate is 9.56% of contributory earnings for years 2025 to 2033 and 9.54% for years 2034 and thereafter.