Examining Risks and Uncertainties in Actuarial Projections

If you’re in the Canada Pension Plan (CPP), then you won’t want to miss today’s conversation with Canada's Chief Actuary, Assia Billig. Assia’s knowledge of the CPP is extensive, having joined the Office of the Chief Actuary (OCA) in 2008, where she was involved in the preparation of statutory actuarial reports on the Canada Pension Plan and Old Age Security Program. She has served as Chief Actuary of the Government of Canada since 2019, and, before joining the OCA, she worked in private pension consulting. She is also a Fellow of the Society of Actuaries and the Canadian Institute of Actuaries. Assia joins us today for a deep dive into the most common questions about the Canada Pension Plan, from the inner workings of its financial components to the quality of governance that drives it. Discover the world-leading topics she and her team investigate, the immense power and research behind their analysis, and why the CPP is set to be sustainable for the next 75 years. We also discuss the concerns some people have about the CPP’s longevity, before examining how the actuarial report on the sustainability of the CPP, conducted every three years, reliably addresses this. If today’s conversation with Canada’s chief actuary does not instill confidence and pride in Canada’s investment in our collective retirement, then we don’t know what will! Tune in, to hear all of Assia’s keen insights and discover why she is unequivocally the best person to talk about the sustainability of the CPP.

Key Points From This Episode:

(0:00:18) Introducing today’s guest, Assia Billig and the Canada Pension Plan (CPP).

(0:04:53) What the main function of the Office of the Chief Actuary is.

(0:06:28) The independence of Assia’s office and the work that they do.

(0:07:09) Unpacking the main purpose of the actuarial report on the Canada Pension Plan.

(0:09:22) Changes that the report triggers to contribution or benefit rates.

(0:13:04) Main revenue sources for the CPP and how base CPP benefit payments are funded.

(0:14:56) Base CPP’s funded status and how funding differs for additional CPP.

(0:20:32) The sustainability of base and additional CPP and how sustainability is measured.

(0:23:22) Primary assumptions that go into sustainability analysis at the high level.

(0:27:31) Estimating expected returns for assets managed by CPP investments.

(0:30:37) The plan’s level of sensitivity to lower realized returns and other variables.

(0:35:22) How lower overall economic growth and inequality affect the plan’s sustainability.

(0:37:15) Measuring the impact of variables like climate change and other catastrophic events.

(0:43:01) When the minimum contribution rate exceeds the current legislated contribution rate.

(0:44:12) Assia’s response to people who are skeptical of the CPP's future sustainability.

Links From Today’s Episode: Meet with PWL Capital: https://calendly.com/d/3vm-t2j-h3p

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ 

Rational Reminder on Instagram — https://www.instagram.com/rationalreminder/

Rational Reminder on X — https://x.com/RationalRemindRational Reminder on TikTok — www.tiktok.com/@rationalreminder

Rational Reminder on YouTube — https://www.youtube.com/channel/

Rational Reminder Email — info@rationalreminder.caBenjamin Felix — https://www.pwlcapital.com/author/benjamin-felix/ 

Benjamin on X — https://x.com/benjaminwfelix

Benjamin on LinkedIn — https://www.linkedin.com/in/benjaminwfelix/

Cameron Passmore — https://www.pwlcapital.com/profile/cameron-passmore/

Cameron on X — https://x.com/CameronPassmore

Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/

Mark McGrath on LinkedIn — https://www.linkedin.com/in/markmcgrathcfp/ Mark McGrath on X — https://x.com/MarkMcGrathCFP

Assia Billig — https://www.osfi-bsif.gc.ca/en/oca

Assia Billig on LinkedIn — https://www.linkedin.com/in/assia-billig-9b861587/?originalSubdomain=ca