Government of Canada
Symbol of the Government of Canada

Office of the
Chief Actuary

Staff image Jean-Claude Ménard
Chief Actuary
Photo: Jean-Claude Ménard, Chief Actuary

The Office of the Chief Actuary (OCA) contributes to a financially sound and sustainable Canadian public retirement income system through the provision of expert actuarial valuation and advice to the Government of Canada and to provincial governments that are Canada Pension Plan (CPP) stakeholders.

The OCA provides statutory actuarial valuation and advisory services for the CPP, Old Age Security Program, the Canada Student Loans Program, Employment Insurance Program, and pension and benefits plans covering the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police (RCMP), federally appointed judges, and Members of Parliament.

The OCA was established within OSFI as an independent unit. The Chief Actuary reports to the Superintendent; however, the accountability framework of the OCA makes it clear that the Chief Actuary is solely responsible for the content and actuarial opinions in reports prepared by the OCA.

Tabling of the 11th Actuarial Report on the Old Age Security Program

The OCA is required by law to produce an actuarial report on the Old Age Security (OAS) Program every three years or whenever a bill is introduced before Parliament that has a significant impact on the financial status of the OAS Program.

Bill C-38, An Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, received Royal Assent on June 29, 2012. Part 4 of Bill C-38 amended the Old Age Security Act to gradually increase the age of eligibility for OAS benefits from 65 to 67, commencing April 1, 2023, with full implementation by January 2029. As required by the legislation, the Chief Actuary prepared the 11th Actuarial Report Supplementing the Actuarial Report on the Old Age Security Program as at 31 December 2009 (11th OAS Program Actuarial Report) in order to show the effect of this bill on the long-term financial status of the OAS. This report was tabled before Parliament on August 22, 2012.

The OAS program, one of the cornerstones of Canada’s retirement income system, is financed from Government of Canada general tax revenues. Given the large number of Canadians reaching age 65 and continued increases in life expectancy, the total OAS expenditures before Bill C-38 changes were projected to increase to $109 billion or 3.2% of GDP in 2030. As a result of the amendments, the 11th OAS Program Actuarial Report shows a reduction of $11 billion in the total OAS expenditures in 2030 as compared to the previous projections.

Canada Student Loans Program Actuarial Report

The statutory Actuarial Report on the Canada Student Loans Program as at 31 July 2011 was tabled before Parliament on June 4, 2012, in accordance with the Canada Student Financial Assistance Act.

The report presents the results of an actuarial review of the Canada Student Loans Program (CSLP) as at July 31, 2011 and includes projections of future costs of the Program through loan year 2035-2036. An actuarial review of the CSLP is prepared to provide an evaluation of the Program's overall financial costs and to increase the level of information available to the Minister of Human Resources and Skills Development Canada (HRSDC), Parliament and the public.

Public Sector Insurance and Pension Plans

In 2012-2013, the OCA completed four actuarial reports with respect to the public sector insurance and pension plans. These reports were submitted to the President of the Treasury Board for tabling before Parliament. Three reports are actuarial reports as at March 31, 2011 on the pension plans for the Public Service of Canada and the RCMP, as well as on the Public Service Death Benefit Account. These reports provide actuarial information to decision makers, Parliamentarians and the public, thereby increasing transparency and confidence in Canada’s retirement income system.

In 2012-2013, important changes were introduced to several public sector pension plans. The Pension Reform Act amending Members of Parliament Retiring Allowances Act (MPRAA) received Royal Assent on November 1, 2012. The MPRAA is amended to gradually increase member contributions commencing January 1, 2013, with the objective that, by no later than January 1, 2017, the total amount of contributions to be paid by members will represent 50% of the current service cost. In addition, for service after January 1, 2016, the age at which a pension may be paid without a reduction is raised from age 55 to age 65, and pensions are modified to take into account the pension benefits payable under the CPP or a similar provincial pension plan. The Pension Reform Act also modifies the allowance to former prime ministers who cease to hold the office after December 31, 2012, and raises the age at which such allowance may be paid from age 65 to age 67. Jean-Claude Ménard, Chief Actuary, appeared before the Standing Senate Committee on National Finance, in October 2012. After introductory remarks, he answered inquiries regarding these changes. The amendments introduced to the MPRAA by the Pension Reform Act will be reflected in future actuarial reports.

Further, Bill C-45, a second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures, received Royal Assent on December 14, 2012. Part 4 of Bill C-45 amends the Public Service Superannuation Act by increasing the pensionable age by five years for contributors entering the plan on or after January 1, 2013, and by increasing the maximum share of the current service cost contribution for contributors from 40% to 50%. As required by the legislation, the Chief Actuary prepared the Actuarial Report updating the Actuarial Report on the Pension Plan for the Public Service of Canada as at 31 March 2011 in order to show the effect of this bill on the cost of the pension plan. This report was tabled before Parliament on March 25, 2013.

Actuarial Report on the Employment Insurance Premium Rate

In 2012-2013, the Office of the Chief Actuary presented to the Canada Employment Insurance Financing Board the 2013 Actuarial Report on the Employment Insurance Premium Rate. This report provides the forecast break-even premium rate for the upcoming year and a detailed analysis in support of this forecast.

The legislative changes brought in 2012-2013 to the Employment Insurance Act, Department of Human Resources and Skills Development Act and Canada Employment Insurance Financing Board Act expanded the mandate of the Office of the Chief Actuary by transferring to OSFI the statutory responsibilities of performing the actuarial forecasts and estimates necessary to set the Employment Insurance premium rate under Section 66 of the Employment Insurance Act. Moreover, starting next year, the actuarial report setting the Employment Insurance premium rate will be tabled before Parliament by the Minister of HRSDC.

Special Events, Presentations and Special Studies

As recommended by the CPP independent peer review panel, the Office of the Chief Actuary continues its program of inter-disciplinary seminars with presentations from experts on subjects relevant to the preparation of future actuarial reports. In September 2012, the OCA hosted a seminar entitled, “Demographic, Economic and Investment Perspectives for Canada – Years 2012 to 2050.” As the Chief Actuary noted in his opening remarks, the retirement of the baby boomers, which has begun, as well as the general aging of the population, make demographic and economic projections difficult, especially regarding the assumption for the proportion of contributors to the CPP. Four renowned Canadian speakers presented their views of the future trends at the event, which was attended by more than 120 officials from federal departments and provincial and territorial ministries of finance. Materials presented at this seminar are available on OSFI’s website under Seminar on Demographic, Economic and Investment Perspectives for Canada – Years 2012 to 2050.

The OCA regularly produces experience studies covering a wide range of social security, demographic and economic issues that may affect the financial status of pension and benefits plans.

In 2012-2013, the OCA released Actuarial Study No. 11 - Old Age Security Program Mortality Experience. This study shows that over the last decade, life expectancy at age 65 has experienced the largest increase since the OAS program’s inception. Over that period, life expectancy at age 65 increased by about two years reaching 20 years in 2010. Moreover, while the growth in the Canadian population is slowing down, the segment of the population aged 80 and older has been one of the fastest growing age groups, and this trend is expected to continue.

As a part of its involvement in the work of the International Social Security Association (ISSA), the OCA prepared a report entitled: Intergenerational Balance of the Canadian Retirement Income System. This report emphasizes that the diversification of the Canadian retirement income system, through its mix of public and private pensions and different financing approaches, allows for periodical corrections of the emerging intergenerational imbalances. The findings of this report were presented by the Chief Actuary, Jean-Claude Ménard, at the ISSA Technical Seminar entitled, “Proactive and Preventive Approaches in Social Security – Supporting Sustainability,” in February 2013.

For a complete list of meetings, presentations and speeches, see OSFI’s website under Office of the Chief Actuary.

Staff image Assia Billig
Actuary,
Canada Pension Plan/Old Age Security,
Office of the Chief Actuary

Nancy Bacon
Regulatory Information Administrator,
FRFI Data Management,
Corporate Services Sector
Photo: Assia Billig, Actuary, Canada Pension Plan/Old Age Security, Office of the Chief Actuary; Nancy Bacon, Regulatory Information Administrator, FRFI Data Management, Corporate Services Sector