Why the CPP now has a $500 billion surplus

Over the past fifteen years, CPP Investments has been one of the most successful pension fund investors in the world. As a result, the assets of the CPP have grown far beyond the levels projected in earlier actuarial reports.

In 2010, according to the Chief Actuary’s 25th Actuarial Report, the CPP fund stood at approximately $134 billion. At that time, the plan was considered fully funded under the actuarial framework, meaning that if the fund earned an average investment return of about 6% per year (the blue box below), it would be sufficient—together with future contributions—to sustain CPP benefits for the next 75 years.

The actuarial projections in that report suggested that, for long-term stability, the fund would reach about $366 billion by December 31, 2025, as shown in the red box.

However, the actual outcome has been dramatically different. According to the CPP Investments website, the fund reached $781 billion on December 31, 2025—more than double the level projected in the earlier actuarial scenario.

What has differed substantially from earlier projections is the investment performance of CPP Investments.

For the past fifteen years, CPP Investments has achieved an average return of roughly 10% per year. Independent pension industry research supports this strong performance. According to Global SWF, a New York–based sovereign wealth and pension fund research organization, CPP Investments ranked first  among 300 major pension funds worldwide for the ten-year period ending in 2022, with an average annual return of 10.9%.

The chart below, based on Table 10 of the Chief Actuary’s 32nd Actuarial Report, illustrates how the CPP fund has grown far beyond the levels anticipated in earlier projections.

With an ongoing 10% return, the fund’s surplus will mushroom by $54 billion in 2026, $61 billion in 2027, and so on.

CPP Investments has several structural advantages that allow it to pursue higher long-term returns than many institutional investors. These include its very long investment horizon, its global diversification, and its large exposure to private markets. For example, the fund’s private equity portfolio—approximately one-third of total assets—reported a 34% return in 2022, according to the CPP Investments 2022 Annual Report on page 43.

For example, consider Ontario’s 407-ETR, a privately operated toll highway. CPP Investments owns approximately 44% of the company that operates the road, making it one of the largest shareholders.

The Pennsylvania Turnpike is frequently described as the most expensive toll road in the world. It charges roughly 20 cents USD per kilometre. In contrast, tolls on the 407-ETR can reach as high as $0.88 USD per kilometre, which is over four times higher.

Despite these higher tolls, the highway is widely used because it can significantly reduce travel time for commuters in the Greater Toronto Area. For thousands of  drivers per day, the time savings outweigh the higher cost.

CPP Investments has also indicated publicly that it expects the fund to continue expanding rapidly. In a March 7, 2026 article in the Globe and Mail, they anticipate increasing the fund from roughly $780 billion in 2026 to $1 trillion by 2028. This implies an annual return of approximately 13% over those two years.

By forecasting using the return of the last 15 years, (as pension experts recommend), the amount needed to meet all CPP pension commitments becomes much less. This means our CPP fund is closer to 300% funded, with a $500 billion surplus.

To put the scale of these figures into perspective:

• A $500 billion surplus means each CPP would represent roughly $23,000 per CPP contributor or pensioner.

• $500 billion is comparable to about $5 trillion in the United States on a relative scale.

• $500 billion is approximately 18 times Canada’s average annual federal deficit (excluding pandemic years).

• $500 billion is equivalent to 36% of Canada’s total federal debt.

These figures raise an important public policy question: how should the financial gains be interpreted, and how should they ultimately benefit the Canadians whose contributions were used to create this windfall?

In most pension systems, when assets substantially exceed the amount required to meet future obligations, a portion of the excess is distributed to members. A common benchmark in pension practice is that a surplus of roughly 25% above liabilities should trigger surplus sharing.

For example, in 2000 the Ryerson University Pension Plan (now Toronto Metropolitan University) had a surplus of approximately 18%. At that time, the Canada Revenue Agency (CRA)required that steps be taken to reduce the surplus, and members of the plan—including professors like myself—received distributions of up to $20,000 each. The CRA has no jurisdiction over the CPP. Nor does our Auditor-General. Pension experts recommend every pension fund has a Board of Governors, primarily made up of contributors and pensioners. The CPP has no such Board. Our Chief Actuary has full control over 10% of the lifetime earnings of most Canadians. Yet he has never mentioned “surplus” in thousands of pages of reports on the status of the CPP. For reasons explained below, it appears he has attempted to bury a $500 billion surplus.

Consider the Public Service Alliance of Canada (PSAC). It represents approximately 245,000 members, including federal public service employees, university staff, and other public sector workers.

Our Chief Actuary also oversees the PSAC pension plan. He has stated, 

“Federal rules say the plan cannot hold a surplus of more than 125% of liabilities, defining such amounts as a ‘non-permitted surplus’”. 

Why would he never acknowledge the CPP’s 200% surplus but announce the PSAC’s 25% surplus as a “non-permitted surplus”? Below will explain.

A central concern in many public pension systems is intergenerational equity—ensuring that different generations of contributors and beneficiaries are treated fairly.

Since 2016, approximately one million low-income Canadian seniors have died. Many of these individuals lived on very limited incomes. If some of the CPP’s surplus, which was created using their money,  was distributed to them, they could have enjoyed a longer life with higher quality. One study found that people in the highest income quintile live 13 years longer than those in the bottom quintile. 

Because politicians and our Chief Actuary refuse to follow standard pension practice, many of these one million low-income seniors died earlier than they should, with a lower quality of life.