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.

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 27.4 cents CDN per kilometre. In contrast, tolls on the 407-ETR can reach as high as $1.20 CDN 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 a 13% return per year for the next two years. In the image below, taken from the Globe and Mail on March 7, 2026, CPP Investments anticipates 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 and an increase in the surplus from $500 billion to over $600 billion.

By forecasting using the average 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 member has, on average, a $23,000 share of the surplus.

• $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 these huge financial gains ultimately benefit the Canadians whose contributions were used to create it?

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. The CPP’s 200% surplus is now eight times the 25% guideline, and mushrooming.

Without a surplus distribution, older pensioners will die never receiving their fair share of the surplus. A surplus distribution addresses the principle of generational equity, the goal of all pension fund managers. One study found that those in the top quintile of income live 13 years longer than those in the bottom quintile. Since 2016, one million low-income seniors have died earlier than they should have, with a lower quality of life because they never received their deserved $10,000 from the CPP’s surplus (which was accumulated using their money).

Standard pension practice recommends a surplus distribution when the surplus is 25% above target. The CPP’s surplus is 200% above target.

Mysteriously, our Chief Actuary has refused to even acknowledge this $500 billion, 200%, surplus. If the news of the CPP’s surplus becomes known, the need for other pension funds, and hence actuaries, will plummet. Details of why and how actuaries have abandoned Canadians and helped suppress the news of the CPP’s $500 billion surplus can be found here.