Another CPP record, but will there be changes?

Last week came the nice news that the value of our CPP reached a new record high of $192.8 billion (up almost $4 billion from the previous quarter). Of that, $0.6 billion came from our CPP contributions, and the rest from investment income.

The CPP investment board has been doing some good work investing in countries throughout the world. Returns are good now. But don’t pop the champagne corks just yet.

In 1987, our Federal government reduced the age at which CPP benefits could be collected (from age 65 to 60). Since then, the average retirement age has dropped.

One implication of that is that more Canadians are collecting CPP benefits, while fewer are contributing.

There is evidence that, in the last few years, more people have been delaying retirement for financial reasons, but as more of us retire, CPP payouts will eventually exceed contributions.

That is cause for concern, especially if investment income drops, which will happen from time to time. This may be one reason that, despite some groups’ demands, the government hesitates to increase the CPP.

This ad appeared in the Richmond News on November 15, 2013.