Annual lists 2002 2001 2000 1999 1998 1997 1996 1995

Ottawa, February 24, 1995
1995-018

Canada Pension Plan Actuarial Report Tabled

The Fifteenth Statutory Actuarial Report of the Canada Pension Plan (CPP) was tabled today in the House of Commons.

The report shows that CPP expenditures are now expected to be considerably higher in both the short- and long-term.

The report on the financial state of the CPP is prepared by the chief actuary of the Office of the Superintendent of Financial Institutions, as required by the CPP legislation.

The Report's main findings are:

• If the existing schedule of contribution rates is not increased and benefits continue as now legislated, the CPP fund, which has a target of two years of benefits, will be exhausted by the year 2015.

• Long-term costs are now expected to be 14.2 per cent of contributory earnings in the year 2030, one percentage point higher than previously expected. The current contribution rate is 5.4 per cent of earnings. If a 14.2 per cent contribution rate had been in effect last year, employees at the average wage of $34,400 a year and their employers would each have contributed $2201 -- instead of $806.

• Costs have risen in the short- and long-term because disability benefits have been higher than anticipated and contributions have been lower as a result of the recent recession.

As required by law, the Ministers of Finance of Canada and the provinces will sit down this fall to look at the financial sustainability of the plan.

The last review of CPP was completed in January, 1991. At that time, contribution rates were adjusted to rise in steeper annual steps to reflect the findings of the actuarial report.

The CPP was established in 1966 after extensive consultations and negotiations with provinces. The CPP operates in all provinces except Quebec, which has a separate plan with similar benefits and identical contribution rates.

A summary of the report, with background information, prepared by the Department of Finance is attached.

___________________
For further information:

Hal Hanes
Social Policy
(613) 992-0030

Réal Bouchard
Social Policy
(613) 996-0622