* Says too early to assess implications for fund
* Proposed changes would start in 2019
* Fund was projected to continue rapid growth
(Adds comment, details from CPPIB)
By Matt Scuffham
TORONTO, June 21 (Reuters) - The Canada Pension Plan
Investment Board, which manages the assets of the country's
national pension fund, said on Tuesday it does not expect a
proposed expansion to the plan to have a significant impact on
its overall investment strategy.
Canada's federal government and provinces agreed in
principle on Monday to support a compromise plan to expand the
national pension plan, with premiums raised moderately over time
to provide greater payouts for pensioners.
"Modest changes to the plan along a multi-year transition
phase - as contemplated - are unlikely to have a significant
impact on the overall investment-related dimensions of the
program," a CPPIB spokesman said.
The CPPIB was created in 1997 to manage the CPP's money and
has grown rapidly, directly investments around the world in
assets such as real estate and infrastructure, as well as
equities and bonds.
It had C$279 billion ($217.75 billion) in assets under
management at the end of March and has forecast that will grow
to C$300 billion by 2020 and C$500 billion by 2030. It said on
Tuesday it was too early to say how those projections will
change.
"It is premature to assess any potential implications
related to the Reserve Fund entrusted to CPPIB to manage over
multiple generations," the spokesman said.
The fund last year generated more in investment income,
C$9.1 billion in fiscal 2016, than it took in from
contributions, which totaled C$5.2 billion.
"Even without any enhancement, the fund has been and will
continue to be on a path of continuing growth over an
exceptionally long period," the spokesman said.
The proposed changes, if formally approved by the provinces,
would start in 2019 and be phased in over seven years, according
to the plan signed by eight provincial finance ministers and
federal Finance Minister Bill Morneau.
Like other governments around the world, Canada faces a
challenge to provide for its aging population. The CPP has been
deemed by some experts as insufficient to provide enough income
in retirement without being supplemented by a workplace pension.
Under the current plan, both employers and employees
contribute 4.95 percent of income up to a C$54,900 cap. The
maximum payout is C$13,110 annually, lower than that of other
wealthy nations.
With the new deal, the earnings cap would rise to C$82,700
by 2025, with the income replacement level increasing to
one-third of the cap.
($1 = 1.2813 Canadian dollars)