(Canada Pension Plan Investment Board website)
(In 2019 Annual Report, the CPPIB claims that the fund is worth $392 billion as of March 31, 2019)
(2016, Chief Actuary claims CPP is sustainable)
(Ezra Levant of Rebel Media addresses CPP)
(Pension ponzi schemes explained)
1. Important Links
CLICK HERE, for Canada Pension Plan Investment Board (CPPIB).
CLICK HERE, for the 2019 CPPIB Annual Report.
CLICK HERE, for the 2018 CPPIB Annual Report.
CLICK HERE, for the 2017 CPPIB Annual Report.
CLICK HERE, for the 2016 CPPIB Annual Report.
CLICK HERE, for the 2015 CPPIB Annual Report.
CLICK HERE, for the 2014 CPPIB Annual Report.
CLICK HERE, for the 2013 CPPIB Annual Report.
CLICK HERE, for the 2012 CPPIB Annual Report.
CLICK HERE, for the 2011 CPPIB Annual Report.
CLICK HERE, for the 2010 CPPIB Annual Report.
CLICK HERE, for the 2009 CPPIB Annual Report.
CLICK HERE, for CPPIB reports on “SUSTAINABLE” investing.
CLICK HERE, for 2016 Triannual Report from Canada’s Chief Actuary.
CLICK HERE, for Chief Actuary’s 2016 Supplemental Report.
CLICK HERE, for information on Canada’s “Green Bonds”.
CLICK HERE, for a previous article on “green bonds.
CLICK HERE, for previous article, $2B in CPP funds sent to India.
CLICK HERE, for a Financial Post article suggesting CPP is being used to prop up public sector pensions.
CLICK HERE, for a Fraser Institute article on CPP unfunded liabilities.
CLICK HERE, for Office of the Superintendent of Financial Institutions, for sustainability of CPP. Using “closed door approach” there are $884.2B in unfunded liabilities. Turn to pages 46-50.
2. Glowing 2016 Press Release
The press release regarding, the Chief Actuary’s report on the sustainability of the Canadian Pension Plan.
This can’t really be taken at face value, as it is all self serving. The notice fails to even acknowledge the elephant in the room, which we will get into.
3. Quotes From Actuary’s 2016 Report
This is a bit troublesome. It will become “known” to the public, or it will become “known” to the people doing the investments? (Page 15 of report.)
(Page 30 of report.) The CPPIB estimates that the percentage of base contributions from investment profits will creep up, and that the additional CPP will eventually become mostly funded from investment income by 2075.
Can’t fault the report for admitting it has to make assumptions. However, the trends of the current government are not great. Admitting large numbers of “refugees” who are and will remain a burden will not contribute to public coffers. Nor will vast amounts of seniors or others who won’t work. Furthermore, making industrial projects more difficult (Bills C-48 and C-69), means additional Canadians not working.
No real surprise. The report concludes that the changes that the Government wants to bring in are exactly what are needed to make the plan sustainable.
4. CPPIB Claims Plan Sustainable Past 2090
CPPIB toots its own horn, stating that the plan is sustainable at least until 2090. Page 5 is a quote from the 2017 annual report.
5. Quotes From 2019 CPPIB Annual Report
This is a graph included at the beginning of the report (page 3). It projects that by the year 2040, the Canada Pension Plan will have over $1.5 trillion in assets. This is in comparison to the $393 billion that there currently is.
It shows that actual assets have been higher than projected assets for the last 3 years.
The report shows a graph with projected assets. However, it doesn’t seem to address liabilities. Specifically, the pension contributions of much younger people who are paying into the system and are entitled to get it out when they retire.
This is impressive. Over the last decade, $239 billion has been added to the fund, an equivalent of 11% annual growth. Of course, one may be forgiven for asking why premiums are so high if it’s all just going into a government fund.
6. CPPIB Claims Fund Is Worth Billions
Note: The sources for this data is in all of the annual reports, going back a decade, which are linked up in SECTION 1.
Inv. Income refers to investment income. This is money CPPIB claims that the funds make annually. Notice the rate of return varies from 6-18%. That is money that CPPIB makes, not money that YOU will be making from the pension plan.
|Year||Value of Fund||Inv Income||Rate of Return|
The value of the pension fund is skyrocketing? Isn’t it? Looking at the values from the annual reports, it has tripled in value in just a decade. This is incredible growth.
What then is the problem?
7. CPPIB Has Billions In Unfunded Liabilities
Not just billions, but hundreds of billions in liabilities.
While the CPPIB staff crow about how sustainable the system is, the Office of the Superintendent of Financial Institutions had a very different conclusion.
What is the difference between open group basis and closed group basis?
The open group approach addresses assets and liabilities with respect to their expectations v.s. reality. The closed group approach, however, measures total assets and liabilities. And to see how much of a difference it makes, see the following two screenshots.
If you use the open group approach, everything looks fine. Reality comes very close to what you are expecting. However, the “closed group approach” takes everything into account, not just expectations.
Remember, when younger workers are paying into CPP, the organization has the money, but it isn’t theirs. It belongs to the workers, even if they won’t retire for 20, 30, or 40 years. The only way “open group approach” works is if the CPPIB had no intention of paying younger workers back.
All things considered, Canada Pension Plan is short $884.2 billion (as of 2016). This is if you don’t use selective accounting.
Paying off current obligations, by taking money from new people. Isn’t that how a ponzi scheme works? To be fair though, there is “some” investing done by CPPIB. It’s just that the bulk of the new money comes from the younger
Guess this partially explains why all parties are so pro-mass-migration. Workers are needed to be shipped in to contribute deductions to fund the shortfall.
8. Is CPP Used To Prop Up Public Pensions?
That is a theory floated over the years. Unfortunately, it gets difficult to prove given how CPPIB will not be honest about their $884.2 billion in unfunded liabilities. Their annual reports seem designed to conceal the truth.
An interesting argument though. If public sector union workers are retiring (or are retired), then they have likely been promised a good pension. However, if those union funds can’t cover it, would CPP be dipped into to make up the difference?
9. CPPIB “Invests” 85% Outside Of Canada
(From page 11 of the 2019 report)
To ask the obvious question: why is the CPPIB so eager to plow its money into FOREIGN ventures? Wouldn’t putting the bulk of it into Canadian projects make more sense?
This is not just a return-on-investment issue. Plowing that money into Canadian industries would help Canadians, and help drive Canadian employment, would it not? This is supposed to be a “Canadian” pension fund.
(From page 13 of the 2019 report). The CPPIB expects that by 2050, nearly 1/2 of all income to the pension plan will be from interest and dividends on its portfolio
For reference, the fund value is calculated using this rough formula
Employee & Employer CPP Contributions + Fund Investment Returns – CPP payouts = Value
So how much of CPPIB investments are in Canada?
That’s right, just 15.5% in Canada. The other 84.5% is invested abroad. Where specifically is this money going?
(1) Midstream joint venture United States US$1.34 billion Formed a joint venture with Williams to establish midstream exposure in the U.S., with initial ownership stakes in two of Williams’ midstream systems.
(2) Grand Paris development Paris, France Formed a joint venture with CMNE, La Française’s majority shareholder, to develop real estate projects linked to the Grand Paris project, a significant infrastructure initiative in Paris.
(3) Ultimate Software United States Total value: US$11 billion Acquired a leading global provider of cloud-based human capital management solutions, alongside consortium partners Hellman & Friedman, Blackstone and GIC.
(4) CPPIB Green Bond Issuance Canada and Europe C$1.5 billion/€$1.0 billion First pension fund to issue green bonds in 10-year fixed-rate notes. Our inaugural Green Bond was a Canadian dollar-denominated bond, followed by a eurodenominated bond.
(5) ChargePoint United States Total value: US$240 million Invested as part of a funding round in preferred shares of ChargePoint, the world’s leading electric vehicle charging network.
(6) European logistics facilities Europe €450 million Formed a partnership with GLP and Quadreal to develop modern logistics facilities in Germany, France, Italy, Spain, the Netherlands and Belgium.
(7) Companhia Energética de São Paulo (CESP) São Paulo, Brazil R$1.9 billion Together with Votorantim Energia, acquired a controlling stake in CESP, a Brazilian hydro-generation company.
(8) Pacifico Sur Mexico C$314 million (initial) Signed an agreement alongside Ontario Teachers’ Pension Plan to acquire a 49% stake in a 309-kilometre toll road in Mexico from IDEAL.
(9) WestConnex Sydney, Australia Total value: A$9.26 billion Invested in WestConnex, a 33-kilometre toll road project in Sydney, alongside consortium partners Transurban, AustralianSuper and ADIA.
(10) Logistics facilities Korea Up to US$500 million Partnered with ESR to invest in modern logistics facilities in Korea.
(11) Challenger fund Australia and New Zealand A$500 million Partnered with Challenger Investment Partners to invest in middle-market real estate loans in Australia and New Zealand.
(12) Ant Financial China US$600 million Invested in Ant Financial, a company with an integrated technology platform and an ecosystem of partners to bring more secure and transparent financial services to individuals and small businesses.
(13) Renewable power assets Canada, U.S., Germany C$2.25 billion Acquired 49% of Enbridge’s interests in a portfolio of North American onshore wind and solar assets and two German offshore wind projects, and agreed to form a joint venture to pursue future European offshore wind investment opportunities.
(14) Berlin Packaging United States US$500 million Invested US$500 million in the recapitalization of Berlin Packaging L.L.C. alongside Oak Hill Capital Partners. Berlin Packaging is a leading supplier of packaging products and services to companies in multiple industries.
That’s right. Our Canadian pension fund is being used to prop up projects in: Australia, Belgium, Brazil, Germany, Italy, Mexico, the Netherlands, New Zealand, South Korea, Spain and the United States.
We won’t invest in Canadian industries, but we will bail them out. Great idea.
What about item #4, those green bonds?
10. CPPIB Endorses Climate Change Scam
So called green bonds are now available for sale. So state the obvious, if climate change were really a threat to humanity, then this is blatantly taking advantage of it.
What happens when it becomes politically untenable for these globalist politicians to keep wasting taxpayer money on this hoax? Will it collapse? Will we have to perpetuate the lie in order to ensure that our “investments” don’t disappear?
(From Page 10 of the 2019 report.) Perhaps no one informed them that the climate change agenda is a scam, and has become a money pit.
This is hardly the first time that green bonds have come up. It will not be the last either.
When they say “risks and opportunities”, what are the opportunities? Will it be investing in a bubble that is sure to burst? Will it be taking advantage of desperate people?
Euro-denominated offerings? Why, is it a bigger market there?
11. What You Aren’t Being Told
The CPPIB admits that the bulk of its fund (around 85%) is actually invested outside of the country. That’s right, Canadians’ pension contributions being used to finance foreign investments. People assume that their money will be recirculated locally, but that is not the case.
CPPIB admits that it embraces the climate change scam. It goes as far as to endorse so-called “green bonds”. Again, this isn’t something the average person would know.
There is a credible case to be made that CPP funds are being used to top of public sector accounts, which are underfunded.
The CPP Investment Board intentionally distorts the truth about the unfunded liabilities. Using the OPEN GROUP approach, they show that actual assets are very close to expected assets, and they can cover their liabilities.
However, the more honest CLOSED GROUP approach will address “all” assets and liabilities, not just current ones. As it turns out, in 2016, the Canada Pension Plan had $285.4B in assets, and $1169.5B ($1.169.5 trillion) in liabilities. This works out to a $884.2B shortfall.
CPP is grossly underfunded.
CPP is being used to top up public pensions.
CPP is being invested in “green” schemes.
CPP is mainly being “invested” out of Canada.
CPP requires ever growing populations.
In short, we are screwed.