Will public pensions be there for me?
Yes. You and future generations can count on Canada's public pensions - the Canada Pension Plan and Old Age Security - for the long term.
Steps were taken in 1998 to ensure the Canada Pension Plan's continued sustainability. Contributions were increased and a new investment policy was adopted. Contributions not required to pay benefits are invested by the Canada Pension Plan Investment Board like other large pension plans.
Canada Pension Plan (CPP) funds can only be used in three ways:
- to pay CPP benefits
- to pay the costs to administer the program; and
- for CPP investments.
The latest actuarial report on the financial state of the Canada Pension Plan, released in December 2009, 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 2012.
Old Age Security benefits are paid by the Government of Canada from general tax revenues. Old Age Security costs will continue to grow as the population ages in the coming decades. However, the costs will be affordable.