Who Manages the Canada Pension Plan Fund? All About CPP Investments
How much do you really know about your future financial security? Read on to learn more about CPP Investments.
For many Canadians, knowledge of the Canada Pension Plan Fund is limited. You’re most likely aware of the financial contributions you make with each paycheck, but what happens to that money between then and when you start to receive it in retirement? And how do you know that money will be there for you when you need it? Read on to learn more about who manages the CPP Fund and what happens to your contributions.
Who manages the CPP Fund?
CPP Investments manages the CPP Fund, which is currently valued over $400 billion. Their investment mandate supports keeping the CPP Fund sustainable for generations to come. By doing that, they’re helping provide a foundation for financial security in retirement.
Why CPP Investments?
CPP Investments was created by an Act of Parliament in 1997 as an independent, professional investment organization that manages the CPP Fund in the best interests of over 20 million working and retired Canadians.
More than 20 years ago, the CPP Fund had a problem. Retirees, on average, were living longer, and not enough new people were joining the workforce to contribute to the CPP. More money was going out from the CPP than was coming in.
That’s where CPP Investments came in. They were set up to invest worker contributions to produce greater returns and help ensure the sustainability of the CPP Fund for future generations.
Where do my contributions go?
Your CPP contributions will go toward post-retirement benefits that are paid out to you beginning, on average, at age 65. You may decide to start receiving your CPP benefits as early as age 60, or you might delay until age 70.
CPP Investments is a group of professionals that handles the investing of CPP contributions. The organization is legally required to manage the Fund in the best interests of contributors and beneficiaries, and to invest its assets to maximize returns without undue risk of loss.
They do so through a diverse and sustainable investment strategy that’s structured to be resilient in the face of wide-ranging market and economic conditions. For example, when selecting which investments to add to the portfolio, CPP Investments will always:
- maintain a long-term view;
- benefit from general economic growth by taking on an appropriate amount of equity risk;
- choose investment programs and asset types with distinct underlying drivers of return and risk;
- avoid being overly dependent on returns in any one country, currency or region; and
- invest strategically as economic and market conditions change.
A strategic investment plan such as this will help support the long-term sustainability of the CPP Fund.
Learn more about CPP Investments.
This content is provided for information purposes only. CPP Investments is not a financial advisor and does not provide financial advice. Every person’s financial planning needs are different. For advice on how you should prepare financially for retirement, please consult a credentialed professional financial advisor.