Workers born in 1993 or later can expect a real rate of return of just 2.5 per cent from the CPP.
The expanded CPP will not increase overall retirement savings.
For every $1 increase in CPP premiums, the average Canadian household reduced its private savings by almost $1.
Mandatory CPP contributions from working Canadians will increase steadily between January 2019 and 2025.
CPP expansion could result in a $114 billion reduction in domestic investment from 2019 to 2030.
For retirees born after 1993, the CPP rate of return will be a meagre 2.5 per cent.
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).
The returns of the CPP's investment arm in no way influence the CPP retirement benefits received by Canadian workers.
The Institute recently released a study that calculated rates of return (nominal and real) received by Canadian retirees from the Canada Pension Plan (CPP).