Mark Machin is president and CEO of the Canada Pension Plan Investment Board.

November is financial literacy month, so what better time to debunk five common myths many Canadians have about retirement savings and pension contributions from the organization that invests the Canada Pension Plan (CPP) Fund on behalf of 20 million Canadians.

Myth No.1

CPP will run out of money before you retire.

Fact

The CPP Fund is on solid financial footing with more than $400 billion in assets. It is projected by the Chief Actuary of Canada to be viable and secure for future generations. While the CPP was determined to be unsustainable more than two decades ago, legislators made changes, including forming CPP Investment Board (CPPIB) to help fix that.

Myth No.2

Politicians tell CPPIB how to invest.

Fact

CPP Investment Board operates without political interference.

First, CPPIB is designed to run arm’s length from governments.

Second, it is made up of experienced investment professionals, and not employees of the governments. Third, our global investment teams make decisions about what goes in our portfolio based on our singular mandate to maximize returns without undue risk of loss, which requires us to invest in the best interest of CPP contributors and beneficiaries like you.

Myth No.3

Your CPP contributions can be used by the government for purposes other than the CPP.

Fact

The money you pay into CPP can only be used to fund the CPP and pay pension benefits. Your contributions are backed to determine your benefits at retirement. Those contributions cannot be used for any other purposes.

Myth No.4

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CPP benefits will cover all my retirement expenses.

Fact

CPP benefits are just one of three pillars of the overall retirement income system in Canada. CPP pays up to about one-quarter of an average worker’s salary –and recent changes made by the federal and provincial governments that steward the CPP mean that amount will ultimately rise to one-third.

CPP is just one part of the retirement puzzle. Other retirement extras come from your personal savings like RRSPs or tax-free savings account, a company pension if you have one, as well as old age security and the guaranteed income system.

Myth No.5

Several years of poor earnings for CPPIB means my pension payout will be less.

Fact

CPP Investment Board invests not for the quarter but the quarter-century, and because of our long-term horizon, we can weather fluctuations in the financial markets in a way that many other investors cannot.

For example, during the 2008 economic downturn, the Fund lost more than 18 per cent. Those losses however did not have an impact on the overall long-term health of the Fund. As of June 30, 2019, our 10-year return was 10.5 per cent and the Fund stands at $401 billion.

In conclusion, we cannot let anticipated short-term monetary blips prevent us from exposing the Fund to financial risk that is necessary to earn sufficient growth over time.

Where misinformation and sensational myths can get in the way of financial peace of mind toward retirement, CPPIB is working to provide a source of comfort as many Canadians continue to save for their golden years.