CANADA - A legislated contribution rate of 9.9% from year 2010 is enough to pay future expenditures and to accumulate assets worth CAD$235bn (US$233.5bn) in 2015, the latest Actuarial Report for the Canada Pension Plan has revealed.
It said: "Better-than-anticipated experience, especially regarding investment performance, labour force participation and employment data, over the period 2004 to 2006 has put downward pressure on the minimum contribution rate.
"On the other hand, a more costly demographic outlook, due to the continuing increases in longevity, combined with an unexpected increase in the number of early retirement benefit uptake, lower inflation expectations and lower rates of return on investments have put upward pressure on the minimum contribution rate."
The report said, under the 9.9% contribution rate, the assets would grow rapidly over the next 13 years. Beyond that, they would continue to grow beyond that, but at a slower pace.
It said: "These are indicators that the plan is financially sustainable over the long term.
"The pool of assets generated over the projection period provides the plan with the capacity, through investment earnings, to absorb some, but not all, of the possible unforeseen economic or demographic fluctuations, which otherwise would have to be reflected in the legislated contribution rate.
"Thus, despite the projected substantial increase in benefits paid as a result of an aging population, the plan is expected to be able to meet its obligations throughout the projection period."
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