27
FEATURE ARTICLE
This is illustrated in the CPP analysis in Table 83, Life
Expectancies of Retirement Beneficiaries by Level of
Base CPP Pension (2019), with future improvements,
which states that a 65-year-old man in 2019 who
receives less than 37.5% of the maximum pension
has a life expectancy of 20.3 years, compared to
22.0 years for a man receiving 95% or more of the
maximum pension. The difference is 1.7 years for
men and 1.4 years for women.
Additional benefit
CPP and QPP are very similar, particularly in
terms of the additional benefit which has been
accumulating since 2019. In Table 31, Projected
Maximum Additional CPP Retirement Benefit, the
CPP report shows how much this benefit could be
at age 65, based on the year of retirement. With
a few adjustments, this table can be used as a
reference point for financial planners. For example,
the additional monthly benefit for a person who
turns 65 after 2064 could be $600 a month (in
2019 dollars). It seems that the QPP statement of
participation will not include this additional benefit
for several months yet.
Conclusion
These triennial analyses are used to define the
return expectations offered in the IQPF and FP
Canada Standards Council Projection Assumption
Guidelines. Curious-minded financial planners can
find relevant information in these reports that can
be very useful for their daily practice. Above all,
however, these analyses serve to reassure us about
the sustainability of these plans. We should also
remember that they are based on the data as at
December 31, 2018. Returns for the year 2019 were
very good, about 10,8%, but we can guess that 2020
will be a tough year. As the asset/expense ratio was
successively superior to previous valuations, one
notes that the returns were exceptional following
2008. Happy reading!