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{:en} John Graham, President and CEO, CPP Investments We live in tumultuous times. Wars in Ukraine and the Middle East, a global pandemic, and rapid technological change have all challenged us in ways we couldn’t have imagined five years ago. It can be easy to forget, given the speed of these disruptions, that one of our greatest challenges has been building slowly for generations. “Demography is destiny” is a phrase often used to draw a foreboding link between population dynamics and a nation’s fate. In periods of uncertainty, demographics can also be a signal for what’s ahead and provide the visibility to prepare for the challenges we’ll face in the future. In Canada, one of our most powerful tools to collectively shape that future is our strong, stable, resilient pension fund, one built for the specific demographic hurdles we’ll face as a country. Indeed, patterns of aging suggest nations will face vastly different challenges in the years ahead. India, which overtook China last year as the world’s most populous nation, now has 1.4 billion people, 68 percent of whom are of working age (between 15 and 64). In sub-Saharan Africa, the working-age population is expected to increase by 740 million by 2050, more than doubling its current level, according to the World Bank. In developed nations, decades of declining birth rates and rising life expectancies have put an opposite set of forces in motion. By 2030, 1.4 billion people across the globe will be aged 60 or older—a figure that will double by 2050, according to the World Health Organization. This trend is particularly powerful in nations like Japan, where 30 percent of the population is already in the 60-plus age group. It’s also present in Canada, where by 2043, one in four Canadians will be over the age of 65—and where fewer people of working age will be there to support a growing retired population. In 1990, there were six people aged 15–64 for every one person over the age of 65. Today, there are 3.5 people of working age for every person over 65. The tighter this ratio gets, the more acute economic and fiscal strains will become. In this landscape, countries with strong pension funds have a decided advantage—and Canada is among them. In the mid-1960s, the Canada Pension Plan (CPP) was introduced to address increased life expectancies and declining family support. But in the 1990s, when the federal and provincial governments realized that these changing demographics would materially impact what the CPP was on track to provide, several changes were made, notably the creation of the Canada Pension Plan Investment Board (CPP Investments). In this landscape, countries with strong pension funds have a decided advantage—and Canada is among them. For the past 25 years, our singular mission has remained clear—invest the CPP to achieve a rate of return high enough to help sustain pension payments for millions of people today and tomorrow. And in a time when other pension plans are struggling, our fund is among the world’s strongest. With a 10-year annualized rate of return of 10.9 percent from fiscal 2013 to 2022, CPP Investments ranked first among national pension funds (according to Global SWF). Every three years, the chief actuary of Canada conducts a financial review of the CPP. Last year, the review concluded that the existing benefit levels are sustainable for 75 years. What contributes to our long-term success? First, we operate at arms-length from federal and provincial governments using a platinum-grade governance framework. Second, we have a clear mandate: to maximize returns without undue risk of loss, while considering the factors that may affect the funding of the CPP. Third, we’re global, investing across all asset classes in most major markets. Finally, we think long-term. In a world where investment philosophies often veer from one quarter to the next, our highly qualified investors are trained to look decades ahead. Demographics tells us there are significant challenges in the future. CPP Investments is proof that a bold promise to generations is achievable if we collectively shape it. This article was originally published by The Milken Institute’s Power of Ideas collection. About the Author John Graham President & Chief Executive Officer Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? 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Next Subscribe Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? Select Source CPP Investments alumni CPP Investments employee or board member CPP Investments portfolio company Online search (e.g. Google) Social media Other What news would you like to receive? * News and updates from CPP Investments Latest news from the Insights Institute Consent * By checking here, you are subscribing to receive our newsletters and other similar types of insights and reports by email, and permit CPP Investments to use cookies and similar technologies to analyze your interactions with our emails. Unsubscribe at any time by clicking the link in the newsletter’s footer. Visit our Privacy Policy for more information. Questions or concerns? Contact us. Please fill in required fields An error has occurred. Please try again later. ShareTweetShare A Fund for Canada Times like this call for a steady hand and a patient approach. Canadians can count on us. Article December 11, 2023 3rd Annual Alberta Energy and Growth Summit The challenge of moving the entire global economy towards lower carbon sources of energy is immense. As investors we view it as a Video November 14, 2023 2023 CEO Letter Times like this call for a steady hand and a patient approach. Canadians can count on us. Article May 24, 2023 {:}{:fr} John Graham, président et chef de la direction, Investissements RPC Nous vivons à une époque tumultueuse. Les guerres en Ukraine et au Moyen-Orient, la pandémie mondiale et l’évolution rapide des technologies nous ont tous confrontés à des défis que nous n’aurions pas pu imaginer il y a cinq ans. Il peut être facile d’oublier, compte tenu de la rapidité à laquelle ces perturbations se produisent, que l’un de nos plus grands défis se met en place lentement depuis des générations. « La démographie est une fatalité » est une expression que l’on utilise couramment pour établir un lien inquiétant entre la dynamique de la population et le sort d’un pays. En période d’incertitude, les données démographiques peuvent également indiquer ce qui se profile à l’horizon et offrir une vue d’ensemble permettant de se préparer aux défis auxquels nous serons confrontés à l’avenir. Au Canada, l’un des outils les plus puissants pour façonner collectivement cet avenir est notre caisse de retraite solide, stable et résiliente, conçue pour faire face aux difficultés démographiques auxquelles le pays sera confronté. En effet, les tendances du vieillissement donnent à penser que les pays seront confrontés à des défis très différents dans les années à venir. L’Inde, qui a dépassé la Chine l’an dernier au palmarès des pays les plus peuplés du monde, compte aujourd’hui 1,4 milliard d’habitants, dont 68 % sont en âge de travailler (entre 15 et 64 ans). En Afrique subsaharienne, la population en âge de travailler devrait augmenter de 740 millions d’ici 2050, soit plus du double de son niveau actuel, selon la Banque mondiale. Dans ces pays, la création d’emplois sera essentielle pour assurer la résilience des générations futures. Dans les pays développés, des décennies de baisse des taux de natalité et d’allongement de l’espérance de vie ont provoqué un ensemble de forces contraires. D’ici 2030, 1,4 milliard de personnes à l’échelle mondiale seront âgées de 60 ans ou plus, une donnée qui doublera d’ici 2050, selon l’Organisation mondiale de la santé. Cette tendance est particulièrement forte dans des pays comme le Japon, où 30 % de la population est déjà âgée de plus de 60 ans. Elle se manifeste également au Canada où, d’ici 2043, une personne sur quatre aura plus de 65 ans et où il y aura moins de personnes en âge de travailler pour soutenir une population croissante de retraités. En 1990, on comptait six personnes âgées de 15 à 64 ans par personne âgée de plus de 65 ans. De nos jours, on compte 3,5 personnes en âge de travailler par personne âgée de plus de 65 ans. Plus ce ratio se resserre, plus les tensions économiques et budgétaires s’accentuent. Dans ce contexte, les pays qui comptent sur de solides caisses de retraite disposent d’un avantage décisif, et le Canada en fait partie. Au milieu des années 1960, le Régime de pensions du Canada (RPC) a été mis en place pour faire face à l’allongement de l’espérance de vie et à la diminution du soutien familial. Toutefois, dans les années 1990, lorsque les gouvernements fédéral et provinciaux se sont rendu compte que cette évolution démographique aurait des répercussions importantes sur les prestations du RPC, plusieurs changements ont été apportés, notamment la création de l’Office d’investissement du Régime de pensions du Canada (Investissements RPC). Dans ce contexte, les pays qui comptent sur de solides caisses de retraite disposent d’un avantage décisif, et le Canada en fait partie Au cours des 25 dernières années, notre mission unique est demeurée claire : investir les fonds du RPC afin d’atteindre un taux de rendement suffisamment élevé pour aider à maintenir les prestations de retraite de millions de personnes aujourd’hui et demain. À une époque où d’autres caisses de retraite connaissent des difficultés, notre caisse est l’une des plus solides au monde. Avec un taux de rendement annualisé sur 10 ans de 10,9 %, de l’exercice 2013 à celui de 2022, Investissements RPC s’est classé au premier rang parmi les caisses de retraite nationales (selon Global SWF). Tous les trois ans, l’actuaire en chef du Canada examine la situation financière du RPC. L’an dernier, l’examen a conclu que les niveaux actuels des prestations sont viables pour 75 ans. Qu’est-ce qui contribue à notre succès à long terme? Premièrement, nous sommes indépendants des gouvernements fédéral et provinciaux et utilisons un cadre de gouvernance de qualité platine. Deuxièmement, nous avons un mandat clair : maximiser le taux de rendement tout en évitant les risques de perte indus et en tenant compte des facteurs susceptibles d’avoir une incidence sur la capitalisation du RPC. Troisièmement, notre portée est mondiale et nous investissons dans toutes les catégories d’actifs dans la plupart des plus importants marchés. Enfin, nous pensons à long terme. Dans un monde où les philosophies de placement évoluent souvent d’un trimestre à l’autre, nos investisseurs hautement qualifiés sont formés pour regarder les décennies à venir. Les données démographiques nous indiquent qu’il y aura d’importants défis à relever à l’avenir. Investissements RPC est la preuve qu’une promesse audacieuse faite aux générations à venir peut se concrétiser si nous la façonnons collectivement. Cet article a été initialement publié dans la collection Power of Ideas du Milken Institute. À propos de l’auteur John Graham President & Chief Executive Officer Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? Select Source CPP Investments alumni CPP Investments employee or board member CPP Investments portfolio company Online search (e.g. Google) Social media Other What news would you like to receive? * News and updates from CPP Investments Latest news from the Insights Institute Consent * By checking here, you are subscribing to receive our newsletters and other similar types of insights and reports by email, and permit CPP Investments to use cookies and similar technologies to analyze your interactions with our emails. Unsubscribe at any time by clicking the link in the newsletter’s footer. Visit our Privacy Policy for more information. Questions or concerns? Contact us. An error has occurred. Please try again later. Next ShareTweetShare A Fund for Canada Times like this call for a steady hand and a patient approach. Canadians can count on us. Article December 11, 2023 3rd Annual Alberta Energy and Growth Summit The challenge of moving the entire global economy towards lower carbon sources of energy is immense. As investors we view it as a Video November 14, 2023 2023 CEO Letter Times like this call for a steady hand and a patient approach. Canadians can count on us. Article May 24, 2023 {:}