Measuring and reporting the actuarial obligations of the Canada Pension Plan

The processes used to assess the financial sustainability of the Canada Pension Plan (CPP) and the corresponding reporting are recognized internationally as “best practices”. In the context of the international and multi‐disciplinary debate about the most appropriate methodology for the measuring and reporting of social security assets and obligations, the experience and practices of Canada offer a number of important policy lessons. The article analyses the assets and obligations of the CPP using different actuarial balance sheet methodologies, i.e. open and closed group. It concludes that the balance sheets under the closed‐group with and without future benefit accruals methodologies do not reflect the nature of the partial funding approach of the CPP, whereby future contributions represent a major source of financing for future expenditures. As such, it is inappropriate to reach a conclusion regarding the Plan's financial sustainability considering only the asset shortfalls determined under the closed group with and without future accruals balance sheets. The article asserts that measuring the Plan's assets and obligations using the open‐group approach provides information that properly reflects how changing demographic and economic environments affect the long‐term sustainability of the CPP. In contrast, using the closed group without future accruals approach may provide incomplete or even misleading information. Finally, the article discusses approaches used to report the financial state of the CPP, including both actuarial and financial reporting. It highlights the comprehensive disclosures approach adopted for the purpose of CPP annual reports and the Public Accounts of Canada. Les méthodes utilisées pour évaluer la viabilité financière du Régime de pensions du Canada (RPC) et pour publier des informations à cet égard font partie des «bonnes pratiques» reconnues à l'échelle internationale. L'expérience et les pratiques du Canada permettent de tirer des enseignements utiles et d'éclairer le débat international et pluridisciplinaire concernant la méthode la plus appropriée pour évaluer l'actif et les engagements de la sécurité sociale et publier les résultats de cette évaluation. Cet article présente une analyse de l'actif et des engagements du RPC qui fait appel à différentes méthodologies pour établir les bilans actuariels, plus précisément à l'évaluation en système ouvert et en système fermé. Il montre que les bilans réalisés en système fermé avec