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Unsourced material may be challenged and removed. 2 billion in investment assets for the Canada Pension Plan on behalf of 20 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 federally 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. 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. 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. Monthly benefits are adjusted every year based on the Consumer Price Index. CPP benefit payments are taxable as ordinary income. An application must be filed at least six months in advance in order to receive CPP benefits, and there is a provision for starting benefits anytime between the age of 60 to 70.
Historically, the adjustment rate was 0. From 2012 to 2016, the Plan is gradually changing the early pension reduction from 0. Conversely, as of 2013, the adjustment rate for retiring after age 65 has increased to 0. The CPP also provides disability pensions to eligible workers who become disabled in a severe and prolonged fashion, and survivor benefits to survivors of workers who die before they begin receiving retirement benefits.
From 1966 to 1996, the contribution rate was 3. By the mid-1990s, the 3.