The Canada Pension Plan (CPP) is a contributory, earnings-related public pension that provides retirement, disability, and survivor benefits to eligible contributors and their families. Employees and employers contribute on pensionable earnings; self-employed people contribute both shares. The CPP is administered federally (outside Québec, which operates the separate Quebec Pension Plan).
| Type | Contributory, earnings-related public pension |
|---|---|
| Main benefits | Retirement pension • Post-retirement benefits • Disability benefits • Survivor & children’s benefits • Death benefit |
| Funding | Employer/employee/self-employed contributions on pensionable earnings (up to annual limits) + investment returns |
| Investments | Managed by CPP Investments (Canada Pension Plan Investment Board) |
| Official info | canada.ca/cpp |
How the CPP works
- You contribute a percentage of employment or self-employment income between a yearly basic exemption and a maximum set annually.
- The retirement pension replaces part of pre-retirement earnings; starting at 65 gives the “standard” amount based on your contribution history.
- You can start as early as 60 (reduced) or as late as 70 (increased); adjustments are actuarial and applied monthly.
- Contributions and benefits are indexed; amounts and thresholds are updated annually.
Benefits
- Retirement pension
Monthly benefit based on contributions and earnings history. You can continue to work while receiving CPP; if under 70, additional contributions can earn a Post-Retirement Benefit (PRB).
- Disability benefits
For contributors with a severe and prolonged disability; includes a flat-rate portion plus an earnings-related portion. A separate children’s benefit may be payable for dependent children of a disabled contributor.
- Survivor and children’s benefits
Paid to a surviving spouse/common-law partner and eligible dependent children when a contributor dies. A death benefit (lump sum) may also be payable to the estate or eligible person.
CPP enhancement
A multi-year enhancement (phased in from 2019) gradually increases future benefit replacement rates and contribution limits to improve retirement income adequacy for contributors, especially younger workers.
Québec Pension Plan (QPP)
Québec operates the QPP with similar structure; interprovincial coordination ensures portability for workers who move between Québec and other provinces.
Applying and payments
Apply online or through Service Canada. Processing considers identity, contributions, and earnings history. Payments are monthly and indexed annually to inflation.
Taxes and interaction with other programs
CPP benefits are taxable; tax can be withheld at source. CPP coordinates with Old Age Security and workplace/private pensions. International social security agreements may help totalize contribution periods for eligibility abroad.
Governance and stewardship
Policy and stewardship rest with federal/provincial finance ministers; investments are managed independently by CPP Investments. Program statistics and actuarial reports are published regularly.
See also
- Old Age Security • Employment and Social Development Canada • Service Canada
- Taxation in Canada • Economy of Canada
External links (official)
- Canada Pension Plan — Overview & apply: https://www.canada.ca/en/services/benefits/publicpensions/cpp.html
- CPP Investments (CPPIB): https://www.cppinvestments.com/