The bulk of current contributions fund the benefits to current retirees.
The program is designed so Canadians who die early in life subsidize those who live longer.
The evidence does not support claims of a widespread retirement savings problem in Canada.
CPP expansion will mean several thousands of dollars more in annual contributions from working Canadians.
Canadians born in 1971 or after can now expect to receive a meagre rate of return from their CPP contributions of between 2.3 per cent and 2.5 per cent (depending on their specific year of birth).
Most Canadians are adequately prepared for retirement, making CPP expansion largely unnecessary.
A narrow focus on pension assets overlooks non-pension assets such as stocks, bonds, real estate and other investments.
In 2014, savings in non-pension assets totalled $9.5 trillion, dwarfing the $3.3 trillion assets in the formal pension system.
On Monday, Canada’s finance ministers announced an “agreement in principle” to expand the Canada Pension Plan (CPP), which will force Canadians to contribute more to the program.
Canadians may be forced to contribute up to an extra $3,250 more to the CPP each year.