Future Proofing the Longevity Economy 2025

1.3 Spotlights on innovation Canada has built one of the world’s most financially resilient public retirement systems. At its core is the Canada Pension Plan (CPP), which has more than CA$675 billion of assets managed by the independent Canada Pension Plan Investment Board (CPPIB). Together, these entities ensure long-term stability and resilience against global economic and demographic pressures. The CPPIB was established in 1997 to manage CPP assets with a professional, non-political approach. Its structure and strategies have transformed Canada’s retirement system into a global benchmark for sustainability.21 –The CPP is designed to cover nearly all of the country’s workers outside of the province of Quebec, which has its own plan. CPP contributors include immigrants and self- employed individuals. –The CPPIB operates at arm’s length from the government, ensuring professional management free from political influence. –CPP assets are allocated across global equities, infrastructure, real estate, private equity and other assets in more than 50 countries, minimizing risks tied to regional economic fluctuations. –Periodic reviews help to ensure that contributions are calibrated to keep the system sustainable for at least 75 years. The CPP’s predictable contribution rates (employees and employers each pay 5.95% up to a yearly maximum, with workers who exceed this maximum making some additional contributions) provide stability for individuals and businesses, protecting against the volatility seen in other systems. The latest actuarial review projects financial sustainability through to at least 2090, bolstering public confidence. Canada’s approach demonstrates how an independent, professionally managed investment board can safeguard retirement systems against demographic and economic challenges. By combining robust actuarial oversight with diversified global investments, the CPP ensures financial security for retirees while maintaining public confidence in the system. The Netherlands has developed a globally recognized pension system that combines collective risk-sharing with adaptive mechanisms to ensure sustainability and equity. The Dutch system integrates public, occupational and private pensions, balancing resilience with fairness while addressing the needs of a mobile international workforce. The first pillar, the AOW (General Old Age Pension), is a universal, pay-as-you-go public pension funded through social security contributions and taxes. By linking the retirement age to life expectancy, the AOW addresses demographic pressures while ensuring basic income security for all residents. The second pillar, occupational pensions, is undergoing significant reform under the Future Pensions Act of 2023.22 One of the options is to transition to collective defined contribution (CDC) plans. Important features include: –Introducing tools for the pension fund to design a life-cycle strategy that better matches the members’ (collective) risk profile. –More transparency of pension pots and how they evolve during the accumulation phase. –Removing ex-ante redistribution effects that no longer match the modern labour market. –In the renewed system, social partners need to make a choice between two contract forms with varying degrees of risk sharing and freedom of choice: the solidary defined contribution scheme and the flexible defined contribution scheme. Both contract forms are collective defined contribution schemes and share the characteristics of personal pension pots, lifelong annuities, diversified portfolios (including alternative asset classes) and the ability to absorb demographic and financial shocks. With 90% of workers enrolled in occupational pensions and a focus on intergenerational equity, the Dutch system consistently ranks highly in global pension indices. The integration of CDC plans, strong governance and relatively high levels of contributions positions the Netherlands as a leader in sustainable retirement systems.Canada’s CPP ensures financial sustainability The Netherlands’ risk-sharing pension system Future-Proofing the Longevity Economy: Innovations and Key Trends 1111