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Archived - Annual Report of the Canada Pension Plan 2000-2001
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The Canada Pension Plan
Almost everyone who works in Canada contributes to the Canada Pension Plan (CPP) or to its sister plan, the Quebec Pension Plan (QPP), and will at some time benefit from their provisions.
Established by an act of Parliament in 1965 and implemented in 1966, the CPP is a jointly controlled federal-provincial plan. Quebec manages and administers its own plan, the QPP, and participates in the decision making of the CPP. Benefits from either plan are based on pension credits accumulated under both. The Plans are financed through mandatory contributions from employees, employers and self-employed persons, as well as from investment income. (Information on the QPP is available from the Régie des rentes du Québec).
While it is perhaps best known for its retirement pensions, the CPP also provides children's, survivor, disability and death benefits. CPP Disability is the largest long-term disability plan in Canada. Vocational rehabilitation services offered under the plan help some disability beneficiaries regain their independence by making it possible for them to go back to earning a regular salary, following a customized return-to-work plan.
Many Canadians live and work in other countries. Others move here after contributing to a pension plan elsewhere. To help protect their pensions, Canada has entered into social security agreements with other nations. These agreements enable Canadians to receive pensions from other countries and to receive CPP payments abroad. They also permit continuity of social security coverage when Canadians are temporarily working outside the country, and eliminate duplicate contribution payments and eligibility requirements.
Benefit calculations are based on how much and for how long a contributor has paid into the CPP. Benefits are not paid automatically - everyone must apply and provide proof of eligibility. However, once eligibility is determined, CPP benefits are paid even if the beneficiary also receives income from other sources. Benefits are adjusted in January of each year to reflect increases in the average cost of living, as measured by the Consumer Price Index.