Mr. Chair, honourable members of the committee, good morning. Thank you for the opportunity to appear before you today.
The primary role of the Office of the Chief Actuary is to provide actuarial services to the federal and provincial governments that are Canada Pension Plan stakeholders. While I report to the Superintendent of Financial Institutions, I am solely responsible for the content and actuarial opinions reflected in the reports prepared by my office.
The Office of the Chief Actuary conducts statutory actuarial evaluations—generally, every three years—on the Canada Pension Plan, the Old Age Security Program, and pension and benefits plans covering the federal public service, the Canadian Forces, the Royal Canadian Mounted Police, federally appointed judges, and members of Parliament. In addition, whenever a bill is introduced before Parliament that significantly impacts the financial status of a public pension plan under the statutory responsibility of the Chief Actuary, the office must submit an actuarial report to the appropriate minister.
Following the passing of Bill C-45, the Public Service Superannuation Act was amended to increase the pensionable age—from age 60 to 65 in the case of new participants—for contributors entering the plan after January 1, 2013. Member contribution rates will be increased to bring their share of the plan's current service cost from 35% to 50%, thereby splitting the cost 50/50 between the members and the government. The President of the Treasury Board, the Honourable Tony Clement, submitted an actuarial report on March 25, 2013.
In the second half of the 21st century, we experienced remarkable gains in life expectancy and highly decreased mortality rates. In 1965, average life expectancy at age 65 was another 15 years. This means that someone who was 65 years old back then could hope to receive their benefits for 15 years, on average, until the age of 80. At that time, women lived slightly longer than men.
Today, 65-year-old retirees can hope to live another 20 years on average—with women still living slightly longer than men. However, the gap between the two sexes is narrowing quickly. According to projections, taking into account future mortality improvements—that is, future gains in life expectancy resulting from decreasing mortality rates—we could expect an additional three to four-year gain in life expectancy at age 65. Around 2050, based on our projections, people will reach the age of 88—people who were 65 years old 23 years earlier. Canadians are living longer, healthier lives and are working to a more advanced age.
According to the most recent labour force survey from Statistics Canada, the number of Canadians between the ages of 65 and 69 who are working has more than doubled over the last 10 years, increasing from 144,000 in 2002 to 374,000 in 2012. The number of those aged 60 to 64 who are still working also increased significantly to reach one million in 2012. Overall, the number of workers between ages 60 and 69 has more than doubled over the last 10 years, increasing from 600,000 to 1.4 million.
In any case, whether the focus is on a pay-as-you-go plan or a fully funded plan, a defined benefit or a defined contribution solution, or a public or private sector pension plan, it's clear that increased longevity will continue to put pressure on pension plan financing.
Thank you very much again for the opportunity to appear before the committee.
I will be happy to answer any questions you might have.