The Cost of Running Canada's Pension Fund
CPP Investments manages over $780 billion of Canadian retirement money. It employs 2,125 people and spends $6.5 billion a year. Here's a breakdown of the costs, compensation, investment allocation, and performance data.
Every working Canadian contributes to the Canada Pension Plan. In fiscal 2024, Canadians contributed $15.9 billion to the fund from individual payroll deductions. That money flows to the CPP Investment Board - a Crown corporation created by an Act of Parliament in 1997 under then-Finance Minister Paul Martin - which invests it on behalf of 22 million Canadians.
CPP Investments is one of Canada's top eight pension funds, collectively nicknamed the "Maple 8." Since its inception in 1999, the fund has contributed $492.1 billion in cumulative net income, which represents roughly 70% of its current value. The remaining 30% comes from net contributions.
What Does It Cost to Run CPP Investments?
In fiscal 2025 (ending March 31, 2025), CPP Investments incurred the following costs to generate $59.8 billion of net income:
That's approximately $6.47 billion in total expenses for a single year. The operating expense ratio has been declining and currently sits at 26.1 basis points, below the five-year average of 27.7 bps. CPP Investments states this is competitive for a fund of its size and complexity.
| Expense Category | Fiscal 2024 | Fiscal 2025 | Change |
|---|---|---|---|
| Operating Expenses | $1,617M | $1,756M | +$139M |
| Investment Mgmt Fees | $1,449M | $1,760M | +$311M |
| Performance Fees | $2,067M | $2,223M | +$156M |
| Transaction Costs | $427M | $730M | +$303M |
| Total | $5,560M | $6,469M | +$909M |
That's a $909 million increase in a single year. Transaction costs alone jumped by $303 million, driven by more than 100 transactions of C$100 million or more in fiscal 2025. Management fees climbed $311 million thanks to growing externally managed assets.
The Cumulative Price Tag
Since the switch to active management in 2006, external management fees have grown from $36 million to over $3.5 billion - a near hundredfold increase. Combining management fees, operating expenses, and transaction costs, Globe and Mail columnist Andrew Coyne calculated total cumulative expenses had exceeded $46 billion through fiscal 2024. Add the $6.47 billion in fiscal 2025 costs, and the running total is now north of $52 billion.
The Staffing Explosion
CPP's workforce growth reflects its transformation from a small passive-investing operation into a global investment management organization.
| Year | Employees | Fund Size | Employees per $1B |
|---|---|---|---|
| 2000 | 5 | ~$44B | 0.11 |
| 2006 | ~90 | $98B | 0.92 |
| 2010 | ~650 | $127B | 5.12 |
| 2016 | ~1,400 | $279B | 5.02 |
| 2020 | ~1,900 | $409B | 4.65 |
| 2024 | ~2,100 | $632B | 3.32 |
| 2025 | 2,125 | $714B | 2.98 |
From 5 employees in 2000 to 2,125 in 2025 - a 42,400% increase in headcount. The fund grew approximately 1,500% over the same period (from $44 billion to $714 billion). The ratio of employees to fund size has improved in recent years as the fund has grown.
CPP Investments now operates out of offices in Toronto (headquarters), New York, London, Hong Kong, Mumbai, Sao Paulo, Sydney, and San Francisco - though the San Francisco office is slated for closure following a strategic review of their global footprint.
Executive Pay: Who's Making What?
CPP Investments discloses compensation for its named executives in its annual report. All figures in this section are in Canadian dollars unless otherwise noted.
| Executive | Title | Total Comp (F2025) |
|---|---|---|
| John Graham | President & CEO | ~C$5.1M* |
| Maximilian Biagosch | Sr. MD & Global Head of Real Assets | ~C$4.5M* |
| Agus Tandiono | Head of Asia-Pacific | ~C$3.8M* |
| Top 5 Executives (average) | ~C$4M each | |
| Top 5 Executives (combined) | ~C$20M | |
*F2025 figures reported in USD by eFinancialCareers (US$3.7M, US$3.26M, US$2.74M respectively), converted at approximate exchange rates. Top 5 average from Globe and Mail analysis.
CEO John Graham's US$3.7 million package (approximately C$5.1 million) broke down into US$1.5 million in immediate pay (salary and non-deferred bonuses) and US$2.1 million in deferred compensation. In fiscal 2023, Globe and Mail reported Graham earned C$5.38 million - meaning his pay has actually come down slightly in recent years. Maximilian Biagosch, who oversees real assets globally and formerly led European operations - a region where CPP's investments returned just 8.8% - earned the highest base salary (US$539K) and highest non-deferred bonus (US$1.2M) of any named executive. Agus Tandiono, the APAC head and former Citadel portfolio manager responsible for 21% of CPP's assets, earned US$2.74 million despite the region delivering just 7.3% returns in F2024 and averaging only 6.2% over five years.
Compensation Comparisons
The Governor of the Bank of Canada makes about $500,000 a year. The Prime Minister of Canada earns roughly $370,000. That means CPP's CEO makes roughly 14x what the Prime Minister makes. In 2020, former CEO Mark Machin took home C$5.88 million before resigning in 2021 after it was revealed he'd traveled to the UAE to receive a COVID-19 vaccine. In 2006, before the switch to active management, the five highest-paid executives averaged about $800,000 each.
Average Employee Compensation
According to Globe and Mail analysis, average total compensation across CPP's entire staff exceeds $500,000. That's the average - not the top. With 2,125 employees and approximately $1.76 billion in operating expenses (which includes salaries, benefits, and other costs), the math works out to roughly $828,000 per employee in operating costs, though not all of that is direct compensation.
Glassdoor reports show a range from about $83,000 for analysts to $242,500+ for directors in base salary, but total compensation (including bonuses) is significantly higher. Managing Directors average around $198,000 in base but $295K-$553K in total comp.
Where Is Your Pension Money?
88% of the CPP fund is invested outside of Canada as of March 31, 2025.
Nearly half the fund - 47% - sits in the United States. That share has been growing as U.S. assets outperform and the U.S. dollar strengthens against the loonie. Meanwhile, only 12% is invested in Canada, despite this being a Canadian pension fund for Canadian workers.
CPP Investments argues this is necessary because Canada represents only about 3% of the global economy. Concentrating too much in Canadian markets would expose the fund to risks tied to Canadian employment rates, wage growth, and life expectancy - the very same factors that affect CPP contributions.
Total Canadian investments as of March 31, 2025 stood at about $114 billion, which CPP says represents an overweight position relative to Canada's share of global markets.
Top 20 Publicly Traded Holdings
CPP Investments files quarterly 13F reports with the U.S. Securities and Exchange Commission disclosing its US-listed equity positions. As of September 30, 2025, CPP held 1,346 US-listed positions with a total market value of approximately US$142 billion. A subsequent filing covering December 31, 2025, shows 1,971 positions worth US$149.5 billion.
The following table shows CPP's 20 largest US-listed equity positions as of September 30, 2025, based on its SEC 13F filing. These figures cover only US-listed securities and do not include private equity, real estate, infrastructure, bonds, or non-US-listed stocks.
| # | Company | Ticker | Value (US$) | % of 13F Portfolio |
|---|---|---|---|---|
| 1 | NVIDIA | NVDA | $8.3B | 5.9% |
| 2 | Microsoft | MSFT | $6.4B | 4.5% |
| 3 | Apple | AAPL | $6.3B | 4.5% |
| 4 | Amazon | AMZN | $3.6B | 2.5% |
| 5 | Broadcom | AVGO | $3.3B | 2.3% |
| 6 | Alphabet (Class A) | GOOGL | $2.6B | 1.8% |
| 7 | Meta Platforms | META | $2.6B | 1.8% |
| 8 | Tesla | TSLA | $2.3B | 1.6% |
| 9 | Mastercard | MA | $2.2B | 1.5% |
| 10 | Bunge Global | BG | $2.1B | 1.5% |
| 11 | GE Aerospace | GE | $2.0B | 1.4% |
| 12 | Alphabet (Class C) | GOOG | $2.0B | 1.4% |
| 13 | Sportradar Group | SRAD | $1.8B | 1.3% |
| 14 | JPMorgan Chase | JPM | $1.8B | 1.3% |
| 15 | Informatica | INFA | $1.6B | 1.1% |
| 16 | Linde | LIN | $1.6B | 1.1% |
| 17 | Viking Holdings | VIK | $1.6B | 1.1% |
| 18 | SPDR S&P 500 ETF | SPY | $1.5B | 1.0% |
| 19 | T-Mobile US | TMUS | $1.5B | 1.0% |
| 20 | Live Nation Entertainment | LYV | $1.5B | 1.0% |
Notes on This Data
Alphabet appears twice (Class A and Class C shares) with a combined value of approximately US$4.6 billion. The SPDR S&P 500 ETF (SPY) is a passive index fund, not an individual company. These 13F filings cover only US-listed securities and represent roughly US$142 billion of the total $714.4 billion fund. CPP also publishes its own annual Canadian and foreign public equity holdings lists on its website, which use a different methodology based on economic exposure including derivatives. Source: SEC 13F-HR filing, accession number 000110465925111415.
What Else Does CPP Own?
Beyond publicly traded stocks, CPP Investments owns a wide range of private and direct assets around the world:
| Investment | What It Is | CPP's Stake |
|---|---|---|
| Highway 407 (Ontario) | Toll highway north of Toronto | 50.01% |
| Petco | U.S. pet store chain | 50% |
| Neiman Marcus | U.S. luxury department store | 50% |
| AirTrunk | Asia-Pacific data centres | 12% |
| Keywords Studios | Video game tech services | ~24% |
| Nuvei | Canadian fintech (payments) | Co-invest |
| Pattern Energy | Wind & solar operator (N. America) | Major stake |
| Castrol (BP) | Lubricants division | Up to US$1.05B |
| CoreWeave | AI cloud computing (Nvidia GPUs) | US$250M loan |
| Quebecor | Canadian telecom | 2.1% |
| Rogers (network infra) | Canadian wireless infrastructure | Co-invest |
| International Towers Sydney | Australian office tower | 50% |
| Crestone Peak Resources | Colorado oil & gas (1,600+ wells) | 95% |
| Homeplus | South Korean discount stores | 21.5% |
The fund is also heavily invested in rental housing across multiple countries - single-family rental communities in the U.S. with Greystar, condominiums in Brazil with Cyrela, rental housing in South Korea with Mangrove, and rental housing in the U.K. with Kennedy Wilson. This has drawn criticism as Canadian pension funds have been blamed for contributing to the financialization of housing and rising rents both in Canada and abroad.
The Active Management Gamble
In 2006, CPP Investments made the decision to move from passive index investing to active management.
The Timeline
Globe and Mail Coverage (May 2024)
Globe and Mail columnist Andrew Coyne wrote that if the fund's managers had simply bought index-linked ETFs, they would have earned more than twice as much on their investments in fiscal 2024 as they actually did. He described the previous 18 years as a "$46-billion spending orgy" that resulted in losing $42.7 billion relative to the benchmark. In response, Motley Fool Canada noted that CPP's 7.7% annualized return since 2006 beat the Canadian TSX Composite Index (5.5% CAGR) and came close to matching the MSCI All-World Index (8.6% CAGR) before accounting for withholding taxes.
CPP Investments argues that their diversified portfolio is designed for resilience over very long time horizons and that private equity, real estate, and infrastructure provide returns that are less correlated with public markets. The fund has spent $52+ billion in cumulative fees to execute this strategy since 2006.
CPP vs. Just Buying the S&P 500
CPP's 10-year annualized net return is 8.3%. The S&P 500's 10-year annualized return is approximately 12-13% over the same period. In fiscal 2025, CPP's public equities returned 10.6% while the S&P 500 delivered 16.9%.
| Period | CPP Net Return | Reference/Benchmark Portfolio | Value Added |
|---|---|---|---|
| Fiscal 2025 (1-year) | 9.3% | 10.9% | -1.6% |
| Fiscal 2024 (1-year) | 8.0% | 19.9% | -11.9% |
| 5-year annualized (F2024) | -- | -- | -2.0% |
| 10-year annualized (F2025) | 8.3% | -- | +1.4% |
| Since Active Mgmt (2006) | -- | -- | -0.1% ann. |
In fiscal 2024, CPP returned 8.0% while its own reference portfolio returned 19.9%, a gap of 11.9 percentage points representing negative $64.1 billion in value-added for that single year.
CPP Investments has changed how it measures performance. In fiscal 2025, it transitioned from "reference portfolios" to new "benchmark portfolios" that it says better reflect the fund's diversified approach.
Controversial Investments
The following investments have drawn public scrutiny or media attention:
Chinese Surveillance Technology
CPP Investments held indirect stakes in Hikvision and Dahua Technology - Chinese surveillance companies whose equipment has been used to monitor and control Uyghur Muslims in China's Xinjiang region. The holdings were part of broader market indices that CPP invested in. In May 2019, Conservative MP Tom Kmiec criticized CPPIB during a House of Commons Finance Committee meeting for these holdings. Then-CEO Mark Machin acknowledged the investments had been "red-flagged for potential future divestment." Both companies have since been placed under U.S. sanctions and banned from U.S. government contracts.
Fire-Sale Real Estate Losses
By February 2024, CPPIB had sold stakes in three commercial properties at steeply discounted prices: a Santa Monica property at a 75% discount from what CPP paid in 2018, two towers in Vancouver for 20% below their 2023 valuation, and its share of a Manhattan office building (360 Park Avenue South) for $1. Boston Properties agreed to assume CPP's share of the project's debt as part of the deal. CPP had already spent $71 million on redeveloping the property.
The Highway 407 Toll Road
CPP's 50.01% ownership of Highway 407 in Ontario makes it the majority owner of one of the most expensive toll roads in North America.
Byju's (India)
CPP invested in Byju's, the Indian ed-tech company that was once valued at $22 billion before collapsing amid fraud allegations, massive losses, and insolvency proceedings. This investment has been written down significantly.
Global Rental Housing
CPPIB and other institutional investors involved in rental housing and REITs have been blamed for rising rents and evictions in Canada and abroad. The financialization of housing has become a prominent political debate in Canada. Former PM Trudeau promised in 2022 to address the issue with new tax policy but abandoned the idea in May 2024.
Oil & Gas
CPP holds a 95% stake in Crestone Peak Resources, which operates more than 1,600 oil and gas wells in Colorado's Denver-Julesburg Basin. The fund has also invested in Alberta pipeline assets and multiple conventional energy vehicles. In its fiscal 2025 annual report, CPP dropped its previous net-zero by 2050 emissions commitment.
Key Figures at a Glance
The fund is projected to remain sustainable for 75+ years. It has generated $492 billion in cumulative net income. The 10-year annualized return of 8.3% exceeds the Chief Actuary's required real return of 3.69%. The fund is on track to reach $1 trillion by 2031 and $3 trillion by 2050. CPP was ranked one of the world's top-performing public pension funds by Global SWF for 10-year returns and ranked second globally in the 2024 Global Pension Transparency Benchmark.
Since the switch to active management in 2006, the fund has spent $52+ billion in cumulative expenses and delivered negative 0.1% alpha relative to its own reference portfolio. Over the same period, the S&P 500 has returned approximately 12-13% annualized compared to CPP's 8.3% over ten years. CPP's public equities returned 10.6% in fiscal 2025 while the S&P 500 returned 16.9%. Staffing has grown from roughly 90 employees to 2,125, and average compensation exceeds $500,000. In fiscal 2025, CPP changed its benchmark methodology from "reference portfolios" to "benchmark portfolios."
Sources
CPP Investments Fiscal 2025 Annual Report (May 2025) - CPP Investments Fiscal 2024 Annual Report - CPP Investments Quarterly Reports - SEC 13F-HR Filing, Canada Pension Plan Investment Board, Q3 2025 (Sep 30, 2025), filed Nov 13, 2025 - SEC 13F-HR Filing, Q4 2025 (Dec 31, 2025), filed Feb 17, 2026 - Globe and Mail, "Eighteen years and $46-billion later, the CPP admits it could have earned more just by buying index funds" (May 2024) - Motley Fool Canada, "CPPIB's Performance Isn't As Bad As You Think" (May 2024) - Parliamentary Budget Office, "Analysis of Active versus Passive Management of Canadian Public Pension Plans" - eFinancialCareers, "The Canadian Pension Plan pays its people handsomely, despite poor performance" (May 2025) - CPP Investments official FAQ and About pages - Wikipedia, "CPP Investments" - BNN Bloomberg (May 2025) - Fortune (Feb 2024) - Various media reports cited throughout.
All figures in Canadian dollars unless otherwise noted. SEC 13F holdings data is reported in US dollars. Data current as of fiscal year ending March 31, 2025, with December 2025 AUM figure from CPP Investments Q2 F2026 report. Top 20 publicly traded holdings as of September 30, 2025.