Canada Pension Plan

The Canada Pension Plan (CPP) (French: Régime de pensions du Canada) is a contributory, earnings-related social insurance program. It forms one of the two major components of Canada's public retirement income system, the other component being Old Age Security (OAS). Other parts of Canada's retirement system are private pensions, either employer-sponsored or from tax-deferred individual savings (known in Canada as a Registered Retirement Savings Plan). As of June 30, 2016, the CPP Investment Board manages over C$287.3 billion in investment assets for the Canada Pension Plan on behalf of 19 million Canadians, making it among the ten largest sovereign wealth funds in the world.

The CPP program mandates all employed Canadians who are 18 years of age 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 Quebec, which operates an equivalent plan, the Quebec Pension Plan. Changes to the CPP require the approval of at least ⅔ of Canadian provinces representing at least ⅔ of the country's population. In addition, under section 94A of the Canadian Constitution, pensions are a provincial responsibility, so any province may establish a plan anytime.

The Liberal government of Prime Minister Lester B. Pearson in 1965 first established the Canadian Pension Plan.

When the contributor reaches the normal retirement age of 65, the CPP provides regular pension benefit payments to the contributor, equal to 25% of the earnings on which CPP contributions were made over the entire working life of a contributor from age 18 to 65 in constant dollars. There is a general drop out provision that enables the lower-earnings years in a contributor's contributory period to be dropped from the calculation of the average. In 2014, the lowest 17% of earnings will be dropped in this way, accounting for up to eight years of contributory earnings.

...
Wikipedia