A Canada Pension Plan pension is a retirement plan available to eligible workers who have earned income in Canada and applied for the benefit, according to Investopedia. CPP retirement benefits are not available to residents of Quebec, which covers workers through the Quebec Pension Plan, states Service Canada.Continue Reading
A worker who earns income in Canada contributes a set percentage of his pay to the CPP, and the CPP contribution is required of all workers in Canada, including the self-employed, Service Canada explains. The percentage a worker is required to contribute varies depending on income, with higher-income workers being required to contribute a greater percentage of their pay, notes Investopedia. The pension amount the worker is eligible to receive upon retirement depends on the amount he paid into the system while working.
The worker becomes eligible for maximum CPP pension payments at age 65 or for reduced payments if he retires between age 60 and 64, according to Service Canada. In addition, a worker may receive a reduced CPP pension upon the death of a vested spouse or upon diagnosis of a chronic disability, states Investopedia. An online calculator for workers to use in estimating payment amounts at various retirement ages is available on the Service Canada website.Learn more about Financial Planning