By the last decade of the 20th century, public pensions had become a Canadian success story. Since their inception, huge numbers of seniors had moved out of poverty. The proportion of seniors with low incomes has fallen sharply in the last decade and a half, from 34 percent in 1980 to 19 percent in 1997.
However, uncertainty about the sustainability of Canada's public pensions grew into an important political issue in the 1990s. Life expectancy was increasing and seniors were making up a greater share of the population. At the same time, the number of workers contributing to the Canada Pension Plan (CPP) was decreasing. Many people were concerned that pensions would not be there for them when they retired.
In response to this growing concern, the Government of Canada and the provinces agreed to make changes to the CPP in 1998:
These changes put the CPP on solid financial ground. Despite the aging population, the Chief Actuary confirmed that Old Age Security and the Canada Pension Plan would continue to be available for future generations. Public pensions were here to stay.
The Canada Pension Plan Investment Board operates independently from government. The Investment Board receives funds not required by the CPP to pay current pensions and invests them in the equity market.
For more information on the Canada Pension Plan Investment Board visit their Web site at: www.cppib.ca