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Canadian Pension Plan – Everything You Need to Know About Contributing, Eligibility, and Benefits

The Canada Pension Plan (CPP) is a social insurance plan in Canada that provides retirement, disability, and survivor benefits. It is designed to provide financial security to Canadians in their retirement years. The CPP is managed by the Canada Pension Plan Investment Board (CPPIB) and is funded by contributions from Canadian workers and their employers.

Under the CPP, eligible individuals receive monthly retirement benefits based on their contributions to the plan throughout their working years. The amount of the benefit is determined by a formula that takes into account the individual’s average earnings and the number of years they have contributed to the plan.

In addition to retirement benefits, the CPP also provides disability benefits to individuals who are unable to work due to a severe and prolonged disability, as well as survivor benefits to the surviving spouse or common-law partner of a deceased CPP contributor.

Participation in the CPP is mandatory for most Canadian workers, with contributions being automatically deducted from their earnings. The contributions are then invested by the CPPIB to generate a return, which helps to fund the future benefits of CPP participants.

The CPP is an important pillar of Canada’s retirement income system, providing a reliable and sustainable source of income for millions of Canadians. It plays a crucial role in ensuring that Canadians can enjoy a secure and comfortable retirement.


What is the Canada Pension Plan?

The Canada Pension Plan (CPP) is a retirement pension plan that provides income support to eligible individuals in Canada. It is a contributory plan, meaning that individuals and their employers contribute to the plan throughout their working years, and in return, they are eligible to receive retirement benefits upon reaching the age of 60 or 65.

Who is eligible for the Canada Pension Plan?

Most individuals who work in Canada and contribute to the CPP are eligible for benefits. To qualify for the Canada Pension Plan, an individual must have made valid contributions to the plan for at least one-third of their contributory period, which is usually the period between the ages of 18 and 65. This means that individuals who have worked in Canada for at least 10 years are generally eligible.

How much can I receive from the Canada Pension Plan?

The amount of Canada Pension Plan benefits that an individual can receive depends on various factors, including their average earnings throughout their working years and the number of years they have contributed to the plan. The maximum monthly CPP retirement pension in 2021 is $1,203.75, while the average monthly CPP retirement pension is around $700. It’s important to note that these figures are subject to change and can vary depending on individual circumstances.

When can I start receiving Canada Pension Plan benefits?

The earliest age at which you can start receiving Canada Pension Plan benefits is 60. However, if you choose to start receiving benefits before the age of 65, your monthly payments will be reduced. On the other hand, if you delay receiving benefits until after the age of 65, your monthly payments will be increased. It’s important to carefully consider your financial needs and personal circumstances before deciding when to start receiving CPP benefits.

What happens to my Canada Pension Plan if I live outside of Canada?

If you live outside of Canada, your eligibility for Canada Pension Plan benefits will generally not be affected, as long as you have made sufficient contributions to the plan. However, there may be certain requirements and restrictions depending on the country you reside in. In some cases, you may need to provide proof of residency or submit additional documentation to continue receiving CPP benefits while living abroad. It is recommended to contact Service Canada for specific information regarding CPP benefits while living outside of Canada.