Letter: Canada Pension Plan is real

By Letter to the Editor on August 12, 2025.

Dear editor:

Larry Simcoe’s recent letter to the editor has some accurate facts but some inaccurate assumptions regarding the Canada Pension Plan and retirement.

First off, the CPP is a real pension. Its initial structure (1966) was not a pension plan, but reforms enacted in 1998 turned the CPP into a real pension plan, independent of government interference and “guidance”. Today the CPP investment board manages over $646 billion dollars in investment assets and, according to the Chief Actuary of Canada, the plan is sustainable over a 75-year period.

The maximum annual pension payment amount is $17,316. I agree with Mr. Simcoe that CPP and OAS are not sufficient amounts to live on. However, the CPP was never designed to be enough to live on.

It was designed to replace about 25 per cent of an individual’s working income. Additional reforms (2017) were implemented that will bring that number closer to 33 per cent over the next 25-30 years.

Most of us will not receive the maximum amount. The average annual CPP is about $10,400. In order to receive that maximum CPP of $17,316, an individual must earn the Year’s Maximum Pension Earnings.

The YMPE is set by the government on a yearly basis. In 2000, the YMPE was $37,600, today it is $73,100. You will need to earn that YMPE or more, for 39 years of your employment life (Age 18-65). The plan also assumes you retire at age 65.

Early CPP will decrease your pension payments by 7.2% each year. As Mr. Simcoe mentions, anyone without a workplace pension needs to have a significant retirement fund and be making regular monthly contributions. Make use of your registered retirement savings plan.

The UCP will not provide a living pension income. At best, their dream is to replace our perfectly working, independently managed CPP with an Alberta version that is a pale imitation one of the worlds best national pension plans.

An affordable retirement requires you to make a significant financial input with some help from our government.

Ray Hoger

Medicine Hat

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