Relax. No reason to worry about the PRC in these volatile
days of wildly fluctuating stock market and the subprime crisis.
The CPP is in good hands – 121.3 billion care fell on the name
17 million Canadians are working and retired people and for generations to come.
But this was not always the case.
Canadians have the former Prime Minister Paul Martin to thank
restored the viability of the country’s pension plan administered by the state, said Bill
Robson, President and CEO, CD Howe Institute.
“He never (Martin) has recognized,” said Robson.
“The reforms have worked well so far.”
In 1996, the CPP was doomed to failure of some people, taking only 11 billion U.S.
The contributions of this year, while paying a whopping $ 17 billion
benefits. With many baby boomers retirement age in 2011
Canada’s actuaries should pay-as-you-go fund would be unable to
payment of benefits in 2015.
It was Martin who had the foresight and the political strength to implement
CPP revolutionary reforms – dramatically increases the rate of contribution
reduction of certain benefits to the separation of funds outside government PPP
assets for investment by an independent board – and has been
command the necessary cooperation of most provinces. Parliament
passed new legislation in late 1997 which came into force in 1998. Quebec hasopted manage their own pension plan, which has not been as well
financially than the CPP.
Since 1997, the CPP gradually increased to 80 percent
5.6 percent of revenues up 9.9 percent, divided equally
by employees and their employers.
In 2008, Canadian workers and their employers pay a CPP shared
rate to 9.9 per cent on income up to $ 44,900, with
Employees pay a maximum annual rate of $ 2,049.30 after a staff
exemption from $ 3,500, an amount equal by their employers. Self
Canadians must provide all costs to a maximum of
$ 4,098.60.
“Canadians do not need to worry,” said Ian Dale, a spokesman
Canada Pension Plan Investment Board, the long arm of Toronto ”
organization created in 1998 to administer the Fund independent of political
interference.
“Canada Pension Plan is sustainable for 75 years and beyond
According to the government (federal) chief actuary. There are all kinds
security measures to ensure that these funds are there to pass
pensioners and invest funds only for their benefit. ”
The CPP contribution rate is limited to 9.9 per cent, without
the expected increase in 75 years, said Dale.
“(CPP) is self-sufficient in 9.9 percent of earned income.”
In fact, the benefits paid by the CPP are fully funded by the new
contributions, leaving intact the funds invested until 2020.
The changes introduced by Bill C-36, which came into force on
January 1, 2008, shall finance the balance, rather than previously payas
you-go financing to build a reserve equivalent to 58 years of benefits
payments. The plan pre-funding as soon-to-boomers retire provide
the burden of future generations, “said Dale, noting that the laws
amendments require new or increased benefits would be fully
funded.

More importantly, perhaps, the reforms of Martin said the CPP fund
separate from active government and administered by an independent
Investment Board.
This means that the federal government may be tempted to borrow
surplus funds, for example, because it has revenue surplus insurance premiums collectedthrough employment or governments of other
countries have done with the national pension funds.
In January 2008, the maximum benefit of the Canada Pension Plan
someone 65 is $ 884.58. The old age security, health care personnel
65 years or more, will remain unchanged at $ 502.31 per month.
Guaranteed Income Supplement for low-income pensioners
$ 634.02.
Although problematic, resolutely independent Quebec Pension could
praying for a bailout of separate management of CPP
suggested by the experts at recent press reports, the reforms of the federal government intends to
which is likely to occur by changing the Constitution – by requiring
approval of two thirds of the 10 provinces, representing two thirds of
The population of Canada.
However, Robson said Canadians must remain vigilant to ensure
funds established for the CPP should not be politicized.
One reason for the Quebec Pension is in financial difficulty
and can not be maintained at 9.9 per cent contribution rate is
the province has recklessly used some pension funds to invest in your business
policy, to date, the CPPIB has made great progress since 1999, when all the extras
CPP funds are invested only in federal and provincial bonds, obtaining a
stable, but the sampling rate of return significantly less than the return of
Stock indices.
Today, more than half the funds – 56.5 percent or 68.5 billion dollars – is
invested in international equities over 1,900 and 700 to Canada
listed companies, with another private equity fund, real
assets and liabilities indexed to inflation. For more information on the CPP
www.cppib.ca, the site of the Canada Pension Plan Investment Board.