Will public pensions be there for me?
Yes. You and future generations can count on Canada's public pensions - the Canada Pension Plan (CPP) and Old Age Security (OAS) - for the long term as two main parts of Canada’s retirement income system.
The following steps were taken in 1998 to ensure the CPP's continued sustainability:
- contributions were increased; and
- a new investment policy was adopted: the Canada Pension Plan Investment Board invests contributions which are not required to pay benefits.
CPP funds can only be used in three ways:
- to pay CPP benefits;
- to pay the costs to administer the program; and
- to make CPP investments.
The latest actuarial report on the financial state of the Canada Pension Plan, released in December 2001, confirms that the Plan is financially sound and will remain so for the next 75 years. Actuarial reports are released every three years. The next report is due in December 2004. The Government of Canada pays OAS benefits from general tax revenues. As the population ages, OAS costs will continue to grow in the coming decades, but at an affordable rate. CPP and OAS provide a modest base on which to build for your retirement and can be supplemented with income from other pensions and personal savings, such as RRSPs.
When you retire, you may be eligible for both Old Age Security and the Canada Pension Plan retirement pension benefits.
- The Differences between OAS and the CPP
- Old Age Security - what you need to know
- Canada Pension Plan - what you need to know
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