Long-Term Sustainability
In the latest triennial review released in November 2010, the Chief Actuary of Canada reaffirmed that the CPP remains sustainable at the current contribution rate of 9.9% throughout the 75-year period of his report. The Chief Actuary's projections are based on the assumption that the Fund will attain an annualized 4.0% real rate of return. The 10-year annualized nominal rate of return of the Fund is 6.7%.
The Chief Actuary's report also indicates that CPP contributions are expected to exceed annual benefits paid until 2021, providing an eight-year period before a portion of the investment income from the CPPIB will be needed to help pay pensions.
Asset Mix----------------------------------------------------------------------------For the period ending December 31, 2012($ billions)---------------------------------------------------------------------------- $ %Equities Public 55.8 32.3 Private 29.6 17.1 ---------- ---------- 85.4 49.4Fixed Income 57.8 33.5(includes bonds, money market securities, other debt and debt financing liabilities)Real Assets Real Estate 19.2 11.1 Infrastructure 10.4 6.0 ---------- ---------- 29.6 17.1----------------------------------------------------------------------------Total(1) 172.8 100.0----------------------------------------------------------------------------(1) Excludes non-investment assets such as premises and equipment and non-investment liabilitiesFive and 10-Year Returns(For the period ending December 31, 2012)---------------------------------------------------------------------------- Investment Rate of Return Investment Income----------------------------------------------------------------------------5-Year Annualized 3.1% $26.0 billion----------------------------------------------------------------------------10-Year Annualized 6.7% $68.6 billion----------------------------------------------------------------------------Excludes operating expensesNote: All figures in Canadian dollars unless otherwise noted.
About CPP Investment Board
CPP Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At December 31, 2012, the CPP Fund totalled $172.6 billion. For more information about the CPP Investment Board, please visit www.cppib.ca.
Contacts:
CPP Investment Board
Linda Sims
Director, Media Relations
(416) 868-8695
lsims@cppib.ca
www.cppib.ca
