ABSTRACT
Investment earnings on the fund will be used to supplement contribution revenue so that contribution rates can be maintained at a "steady state" after 2003, with no further increases. The adoption of this form of privatization has generally been seen as a way of strengthening the publicly managed plan so it will continue as a social insurance arrangement for the foreseeable future. Canada's retirement income system has a mix of public and private arrangements that is generally acknowledged to be a reasonable balance between collective and individual responsibility for retirement provision. The move to partial funding of the Canada Pension Plan has been welcomed by many as an innovative approach to addressing the concerns generated by pay-as-you-go plans in light of population aging. Ultimately, federal and provincial ministers rejected the form of privatization. Under considerable pressure from the business community, they decided that combined employer/employee contribution rates could not be allowed to exceed 10 percent of covered earnings.
