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News broke on the weekend that the provincial and federal finance ministers will re-examine certain aspects of the Canada Pension Plan (CPP) reforms agreed to in late 2016 — yet they will avoid a larger re-evaluation of the efficacy of an expanded CPP. Clearly, however, a genuine review of the reforms would result in their undoing.

For example, one of the principle arguments for an expanded CPP was its rate of return. Unfortunately, this argument conflates the rates of return from the investment arm of the CPP — the Canada Pension Plan Investment Board or CPPIB — and the actual returns received by CPP contributors.

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The CPPIB, which invests the surplus funds of the CPP, has performed well. Over the last five years ending in 2016, it earned an annualized rate of return of 11.8 per cent, which is impressive.

However, the returns of the CPPIB do not directly affect CPP benefits received by retirees, which are based on one’s earnings over time — between the ages of 18 and 64 — relative to the average industrial wage and when the person retires.