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A Reference Guide - Old Age Security and Canada Pension Plan
Canada Pension Plan
Funding the Plan
The CPP is a contributory plan. This means that all costs are covered by the financial contributions of employees, employers, and self-employed workers, and from revenue earned on CPP investments. The CPP is not funded through general tax revenues.
The CPP Investment Board invests CPP funds in financial markets, broadly following the same investment rules as other pension plans. It is accountable to the public and reports its investment results regularly. The Board operates at arm's length from the federal and provincial governments.
To ensure that the CPP remains financially sound, the combined employer-employee contribution rate has consistently risen over the past few years and is now at a level that is expected to sustain the Plan well into the future. Federal and provincial finance ministers continue to review the Plan's financial state every three years, as required by the legislation.
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