Chief Actuary projects steady CPP funding as markets and contributions cover rising retiree costs
Canadians’ main public pension is on track for the next 75 years without higher contribution rates, even as the population ages and benefits grow.
According to the Office of the Chief Actuary’s 32nd actuarial report on the Canada Pension Plan (CPP), the Plan remains fully sustainable over the next 75 years at current legislated contribution rates.
The CPP covers more than 22 million contributors and beneficiaries, including over six million current beneficiaries, and now operates through a base and an additional component.
Contribution rates: room below the ceiling
According to the Chief Actuary, the minimum contribution rate (MCR) needed to sustain the base CPP is 9.21 percent for 2028–2033 and 9.19 percent from 2034 onward, compared with the statutory rate of 9.9 percent.
The report states that this keeps the base component below the legislative trigger for automatic adjustments, so no policy action is required to change base CPP contributions.
For the additional CPP, the report sets a first minimum contribution rate of 2.01 percent on contributory earnings up to the Year’s Maximum Pensionable Earnings (YMPE).
It sets a second minimum rate of 8.04 percent on earnings between the YMPE and the Year’s Additional Maximum Pensionable Earnings (YAMPE), starting in 2028.
The Chief Actuary notes that these additional minimum rates remain within the permitted deviation from statutory rates and are therefore sufficient to sustain the enhanced CPP over the long term.
CPP Investments, which manages the CPP Fund, points out that minimum contribution rates for both parts of the Plan remain at or below legislated threshold ranges, so ministers are not required to adjust contributions to maintain the Plan’s ability to meet its obligations to contributors and beneficiaries.
Investment income as a key funding driver
The actuarial report shows that investment returns, rather than contributions alone, will carry a growing share of CPP funding over time.
For the base CPP, the Chief Actuary reports that total assets were $651bn at the end of 2024 and are projected to reach $963bn by 2030 and $2.9tn by 2050 under current assumptions.
With the statutory contribution rate of 9.9 percent, contributions are expected to exceed expenditures until 2030, but from 2031 onward a rising portion of investment income will be needed to pay benefits.
In 2031, about 1 percent of investment income is projected to be used for expenditures, increasing to about 12 percent by 2050 and about 26 percent by 2070.
According to the report, investment income for the base CPP is expected to represent 37 percent of revenues in 2025, 39 percent in 2030, 48 percent in 2050 and 63 percent by 2100.
For the additional CPP, assets are projected to grow from $54bn at the end of 2024 to $214bn by 2030 and $1.4tn by 2050, with investment income expected to account for 62 percent of revenues by mid‑century.
CPP Investments notes that, since 2009, investment income has taken on an increasingly important role in contributing to the CPP’s long‑term financial stability, reinforcing the importance of its management of the CPP Fund.
Ageing, volumes and cash flows
The Chief Actuary’s projections said that the number of CPP contributors is expected to rise from 16.1 million in 2025 to 19.3 million in 2050 and 24.5 million by 2100, although growth in the working‑age population slows over time.
The report forecasts that the number of base CPP retirement beneficiaries will increase from 6.4 million in 2025 to 7.3 million in 2030, 9.5 million in 2050 and 15.5 million by 2100 as the population ages and baby boom cohorts continue to retire.
Total base CPP expenditures are projected to grow from about $68bn in 2025 to $88bn in 2030, $197bn in 2050 and $1.3tn by 2100.
The Chief Actuary also highlights the structural shift in the support ratio.
For Canada outside Quebec, the ratio of people aged 20–64 to those 65 and over is projected to fall from 3.2 in 2025 to 1.9 by 2080.
Despite that, the statutory 9.9 percent base CPP rate remains sufficient over the projection horizon, even as the pay‑as‑you‑go rate (the rate needed if there were no assets) climbs from about 9.3 percent in 2025 to 13.9 percent in 2100.
Oversight and implications for planning
Under CPP legislation, the Minister of Finance and provincial ministers must review the Plan’s financial state every three years, based on information provided by the Chief Actuary.
The 32nd actuarial report covers a 75‑year horizon for both the base and additional CPP, using best‑estimate demographic, economic and investment assumptions without margins for adverse deviations.
As part of its process, the Office of the Chief Actuary commissioned an external peer review of the report to test methods and assumptions against professional standards.
