Independent panel backs OSFI’s actuarial report on the CPP
The review also surfaced a point advisors can use with clients. The panel observed that Canadians and their financial planners are gradually recognizing the value of deferring a CPP pension, and that many planners now recommend it. It expects more Canadians to delay claiming as they weigh working longer, longevity, the implicit return from waiting and the tax effect of drawing a pension while still on the job.
The panel did not treat the plan as risk-free. It called investment risk the single largest risk facing the CPP – the base plan held $651 billion in assets and the additional plan $54 billion as at December 31, 2024 – and urged readers to study the report’s sensitivity tests and scenario analyses closely. In an appendix it noted fell outside its formal mandate, the panel suggested the plan’s Stewards review the current financing policy, cautioning that undervalued risks could shift costs to the next generation.
The panel made six recommendations to sharpen future reports, covering stronger earnings and migration data including better identification of non-permanent residents, more analysis of workforce participation at older ages, a closer look at earnings distribution trends, fuller disclosure of scenarios that could push the base plan’s minimum rate up to the legislated 9.9%, and continued work on climate-change scenarios. The previous panel, reviewing the 31st report, had made 17.
The United Kingdom Government Actuary’s Department confirmed the panel conducted its work with appropriate professional rigor. Chief Actuary Assia Billig said the findings affirm the quality, rigor and professionalism of the office’s work and reinforce the value of forward-looking analysis in a climate of heightened risk. The OCA produces an actuarial report on the CPP every three years.
The full text of the Review of the 32nd Actuarial Report on the Canada Pension Plan is available at https://www.osfi-bsif.gc.ca/en/oca/independent-peer-reviews/review-32nd-actuarial-report-canada-pension-plan.
