Government Benefits in Canada

Canadian Pension Plan

The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. It forms one of the two major components of Canada's state-sponsored retirement income system, the other component being Old Age Security (OAS). The intention of the CPP program is to mandate all employed Canadians 18 and over to contribute a prescribed portion of their earnings income to a nationally administered pension plan. The plan is administered by Human Resources and Social Development Canada on behalf of employees in all provinces and territories except Québec.

The CPP is not fully funded and is sometimes referred to as a "pay-as-you-go" plan. In other words, assets held in the CPP fund are purposely insufficient to pay for all future benefits accrued to date. Future sustainability of the CPP relies on future CPP contributions (plus the assets built up to date) being equal to or greater than CPP benefit payments expected to be paid out. This is typical of social insurance schemes, but atypical of other public or private sector pension plans. The CPP's chief actuary submits a report to parliament every three years.

Source: wikipedia