Calculating Alberta’s Fair Share of the CPP Fund
The actuarial profession, in collusion with the media, has employed deliberate tactics to delay Alberta’s receipt of its rightful share of the CPP fund. This resistance is rooted in a startling truth: the CPP, thanks to CPP Investments’ world-class performance, could theoretically provide a 25-year-old Canadian with a $100,000 CPP pension in today’s dollars. Such news threatens to upend the actuarial profession by undermining the need for additional pension funds and, by extension, actuaries themselves. Here’s how this betrayal has unfolded:
Manipulative Calculations
Canada’s largest actuarial firm, Lifeworks, exploited an obscure clause in the Canada Pension Plan Act to calculate Alberta’s share of the CPP fund as an inflated and absurd 53%. This approach lacked transparency and fueled confusion.Media Misinformation
Instead of clarifying the issue, the media irresponsibly amplified fears, falsely claiming that Alberta’s CPP pensions might disappear if the province received its share. This narrative painted Premier Danielle Smith’s reasonable demands as reckless, further stalling progress.Chief Actuary’s Refusal
In early 2024, Canada’s Chief Actuary was tasked with determining Alberta’s true share of the CPP fund. After delaying the task for nearly a year, our Chief Actuary refused to calculate Alberta’s share in December 2024, adding yet another barrier to resolving the matter.
The Consequences of Delay
These delaying tactics, driven by an actuarial profession desperate to protect its relevance, could stretch for years. If Alberta’s Finance Minister demands a proper calculation, it’s likely our Chief Actuary would undervalue Alberta’s share, forcing the province to either accept a significant financial shortfall or engage in a lengthy and costly Supreme Court battle.
This obstruction has devastating consequences:
Lost Benefits for Millions: Each year of delay denies millions of Canadians their rightful surplus distribution, including approximately three million seniors who have already passed away without receiving their deserved $10,000 or more—a total of $30 billion in unpaid but deserved benefits.
Impact on Low-Income Seniors: Among the deceased are roughly one million low-income seniors for whom a $10,000 payment would have increased their income by 40%, significantly improving their quality and length of life, according to numerous studies.
A Gross Failure in Generational Equity
The primary goal of pension fund managers is generational equity, ensuring that resources are distributed fairly across age groups. The deliberate actions of the actuarial profession and complicit media represent a monumental failure to uphold this principle. When millions of people are knowingly deprived of resources essential to their well-being—resources that could extend their lives—it raises serious ethical questions.
A Simple Calculation
Determining Alberta’s fair share of our CPP fund is not a complex task. The same straightforward logic applies to calculating the individual surplus share for each Canadian. Yet this clarity has been obscured by vested interests intent on preserving the status quo.
Why January 1, 2010, is a Critical Benchmark for CPP Analysis
January 1, 2010, serves as an ideal starting point for evaluating the Canada Pension Plan (CPP) for two key reasons:
The CPP Was Fully Funded in 2010
According to the OCA’s 25th Actuarial Report, the CPP was virtually 100% funded as of January 1, 2010. The fund was deemed capable of meeting all pension obligations for the next 75 years and beyond, providing a strong baseline for calculations.The Concealment of the Emerging Surplus Began
Starting in 2010, CPP Investments' consistent success led to the accumulation of a surplus. Rather than disclose this surplus, our Chief Actuary chose to obscure it, likely motivated by concerns about the negative impact on the demand for actuarial services. One leading Canadian actuary aptly summarized this behavior, stating that our Chief Actuary, “invents measures that are easily manipulated so that actuaries can control the narrative and hide things at will.” This assessment aligns with my eight years of research. Meanwhile, the ten top Canadian actuaries who I have consulted have all denied the surplus with vacuous arguments.
Evidence of the Surplus and our Chief Actuary’s Failures
The evidence supporting the existence of a massive CPP surplus is compelling, as are the reasons to question the reliability of actuarial reports after 2010:
Superior Investment Returns
Since 2010, CPP Investments has delivered an average return of 10% annually, far exceeding the 6% return specified by our Chief Actuary as sufficient to fund all pensions for 75 years.Net Cash Flow Surplus
All other pension factors—such as increased longevity, baby boomer retirements, net migration, employment rates, inflation, and disability pensions—are encapsulated in one value: Net Cash Flow.Finance Minister Freeland, in an email to me, showed concern for these factors. However, our Chief Actuary has more than allowed for these factors. Over the past 15 years, our Chief Actuary has consistently underestimated Net Cash Flow, resulting in a cumulative surplus of $18 billion.
Staggering Fund Growth
In 2010, our Chief Actuary projected the CPP fund would grow to $347 billion by January 1, 2025.
By contrast, the actual fund value (comparable Base CPP) is projected to reach $650 billion by January 1, 2025, assuming a conservative 6% return. This represents a surplus of $303 billion.
Because of CPP Investments’ ongoing likely 10% return, the surplus is closer to $400 billion.
Lack of Transparency
Despite these clear indicators, thousands of pages of actuarial reports fail to even mention the term "surplus." Moreover, as the surplus has mushroomed, our Chief Actuary has continually reduced her forecast of investment return from above 6% to below 6%.Standard pension practices demand that a surplus of this magnitude be distributed. Based on these practices, $200 billion should be allocated to approximately 20 million Canadians.
The Urgent Need for Accountability
Our Chief Actuary operates in a conflict-of-interest environment, is not subject to audits, and is effectively depriving Canadians of substantial benefits. The lack of oversight enables her to manipulate narratives to protect her profession at the expense of transparency and fairness.
Conclusions and Recommendations
Post-2010 Reports Are Unreliable
Given our Chief Actuary’s clear attempts to control the narrative and obscure key facts, actuarial reports published after 2010 should not be used as a reference.Accurate Calculations Without Actuarial Reports
The data required to calculate both a Canada-wide surplus distribution and Alberta’s rightful share of the CPP fund is available and can be determined independently of any reports issued after 2010.Scrutiny and Reform Are Essential
Canadians deserve an accurate and transparent accounting of their CPP surplus. The current practices of our Chief Actuary demand intense scrutiny, third-party audits, and a reassessment of the governance structures overseeing the CPP.
By addressing these issues, Canadians could unlock billions in surplus funds, leading to widespread economic and social benefits while restoring trust in one of Canada’s most important public institutions.
The Basis of the Calculation Logic
Imagine you invested $10,000 in a bank fund while I invested $1,000 in the same fund. The bank targeted a 6% return but achieved a 10% return over one year. Your return would be $1,000, with $400 categorized as a "surplus" above the target. My return would be $100, with $40 as “surplus”. This proportional allocation of “surplus” in a fund is standard practice in the investment industry.
This analysis applies the same principle to determine how the CPP’s surplus should be allocated among individual Canadians. The logic is straightforward: the larger your contributions to your personal CPP account during a surplus-generating period, the greater your proportional share of the surplus.
Using our Chief Actuary’s Returns as a Baseline
It’s essential to note that when CPP members made contributions, a portion of those contributions was used to pay current pensioners, with the remaining balance invested by CPP Investments. As a result, not all contributions earned the target 6% return. Instead, they achieved the returns outlined in the table on page 48 of our Chief Actuary’s 27th Actuarial Report.
Nominal returns represent actual returns before inflation adjustment. Real returns account for inflation.
Generational Inequity in Returns
According to this table, Canadians born before 1960 have benefited from significantly higher returns compared to younger contributors. This inequity means older Canadians should receive proportionally less, or even no surplus, compared to younger Canadians.
To address this, a fair distribution formula could adjust surplus shares based on age. For instance:
A 60-year-old might receive 98% of their calculated surplus.
A 61-year-old might receive 96%, and so on.
A 100-year-old might receive only 18% of their calculated surplus.
Applying a Fair Internal Rate of Return
For fairness across all members, this analysis assumes a uniform internal rate of return of 4.4% for CPP contributors. This approach ensures proportional allocation while addressing generational imbalances.
Countering Actuarial Claims of Inaccuracy
Some actuaries might argue that this approach introduces minor inaccuracies. However, such claims are overshadowed by the profession’s more significant ethical lapses, including:
Delaying the determination of Alberta’s fair share of the CPP fund.
Denying the existence of a $400 billion CPP surplus.
As a result of these delays, approximately 100,000 low-income Canadians die each year without receiving their rightful $10,000 share of the surplus. For these individuals, the surplus would increase their income by roughly 40%, improving both the quality and length of their lives.
A Moral Obligation to Act
The United Nations defines genocide as “deliberately inflicting conditions of life calculated to bring about its physical destruction in whole or in part.” By continuing to delay surplus calculations and fair distribution, the actuarial profession bears culpability. Many Canadians suggest our Chief Actuary is guilty of genocide.
Illustrating the Calculation of Each Member’s Surplus Share
This example demonstrates how each CPP member’s share of the surplus can be calculated. All numbers below are illustrative, and our Chief Actuary has access to the actual figures required for precise calculations.
Starting Contributions
Consider a Canadian who had contributed $80,000 to the CPP by January 1, 2010.Base Value Adjustment
Using an internal rate of return of 4.4% on contributions, the true value of this member’s contributions as of January 1, 2010, would be $100,000. This date serves as the baseline for this analysis.Aggregate Fund Value
Using this same calculation for all 21 million CPP members, presume the total value of contributions as of January 1, 2010, is $1 trillion. This means our sample member held:$100,000 ÷ $1 trillion = 0.00001% of the fund in 2010.
Target vs. Actual Returns
Our Chief Actuary targeted a 6% return for 2010, but CPP Investments achieved a 10% return. The surplus generated that year was $10 billion.Individual Surplus Allocation
Based on their share of the fund, our sample member would receive:0.00001% × $10 billion = $1,000.
This amount is credited to a newly created “surplus account” in the member’s CPP record.
(Note: Each CPP record already tracks annual contributions, so this new surplus account would complement existing data.)Yearly Surplus Growth
In subsequent years, the member’s surplus grows due to investment returns and the calculation of additional surpluses:Surplus Investment Growth: The $1,000 surplus grows by 10%, thanks to CPP Investments’ return in 2011. Presuming a 10% return in 2011, his surplus grows to $1,100.
Base Fund Growth: Presume the member did not work or contribute in 2010. Hi $100,000 base grew by 4.4% to $104,400. Repeat the surplus calculation in 3 to 5 above using 2011 data. Presume the member’s 2011 surplus is $1,050. His total surplus by January 1, 2012, is $1,100 + $1,050 = $2,150.
Cumulative Growth to 2025
Continue this process through January 1, 2025, for all members. Presume the sample member’s cumulative surplus totals $30,000 and the combined surplus for all members is $300 billion.
Surplus Distribution Example
If, for example, our Chief Actuary or Finance Minister decides to distribute $200 billion of the CPP’s surplus, each member’s payment is proportional to their share of the total surplus:
Key Takeaways from This Logic
Precise Distribution
Exactly $200 billion will be distributed, ensuring no surplus is overlooked or misallocated.Fair Proportionality
Each member’s share is based on how much of their contributions CPP Investments used to generate the surplus, ensuring an equitable distribution.Efficiency and Transparency
This approach can be implemented with existing data and computational resources, ensuring fairness and efficiency in the process.
How Much Should Alberta Receive from the CPP Fund?
As of January 1, 2025, the Base CPP fund is estimated at $650 billion, which comprises two components:
Target Fund Value: $347 billion, based on projections from the 2010 25th Actuarial Report.
Surplus: $303 billion, generated through investment returns exceeding expectations.
Step-by-Step Allocation Logic
Calculate Member Contributions
For every Canadian, apply a 4.4% annual return on their contributions to determine the current value of their account.
If the total value across all members does not equal $347 billion, adjust the individual shares proportionally to ensure alignment with the target fund value.
Determine Alberta’s Target Share
Compute the total value of contributions from Alberta residents, estimated at $55 billion.
Allocate Surplus to Alberta Residents
Use the surplus field as shown above for each Alberta resident to calculate their share of the $303 billion surplus.
This total is estimated at $45 billion.
Combine Alberta’s Shares
Add the target fund value to the surplus share for Alberta:
$55 billion (target) + $45 billion (surplus) = $100 billion.
Feasibility of Implementation
Based on my experience spending one-third of my working life programming computers, this logic can be implemented efficiently:
A skilled programmer, given access to the file containing every CPP member’s contributions by year, could program the calculation in approximately one week.
While survivor and disability pensions might add some complexity, these can be factored in without altering the core logic.
This straightforward approach ensures that Alberta’s share—and every Canadian’s surplus share—is calculated fairly and transparently.
A Call to Action for our Chief Actuary
Chief Actuary Billig, for over a decade, you and your predecessors have failed to address this critical issue. As a result:
One million low-income Canadians have been deprived of approximately $10,000 each, a significant amount that could have increased their quality of life and longevity.
This failure represents a monumental breakdown in generational equity, the core principle of pension fund management.
While this calculation method may not be perfect, implementing it now would prevent further injustices. By continuing to deny the existence of the CPP surplus, your actions risk being labeled as a severe ethical failure—or worse.
Public Accountability
If these tactics persist, you may remain atop my Reverse Order of Canada list—reserved for those who have caused the most harm to the prosperity and longevity of Canadians.
It is inconceivable that with access to:
A large team of actuaries,
Expert computer programmers,
Comprehensive CPP records,
And powerful computational tools,
You cannot calculate Alberta’s share promptly. The logic outlined above is clear and easily executable. Canadians will soon be asking why this calculation has been delayed for so long when it could be completed within a week.
Final Appeal
Please fulfill the duties that Canadians have entrusted to you. The credibility of your profession—and the well-being of millions of Canadians—depends on it.