The CPP is a mandatory, employment-related pension system governed jointly by the federal and provincial governments and administered by the federal government. It pays retirement and other benefits calculated in relation to earnings up to a maximum approximating the average wage and charges contributions on earnings between a yearly minimum of $3,500 and the same maximum. Originally set up to run on a pay-as-you-go basis with no significant prefunding of benefits, the CPP underwent reforms in 1998 that trimmed benefits and ramped up contribution rates.Since 1966, nearly all working Canadians outside Quebec have contributed to and accrued benefits from the Canada Pension Plan (CPP). The CPP is a mandatory, employment-related pension system governed jointly by the federal and provincial governments and administered by the federal government. It pays retirement and other benefits calculated in relation to earnings up to a maximum approximating the average wage and charges contributions on earnings between a yearly minimum of $3,500 and the same maximum. Originally set up to run on a pay-as-you-go basis with no significant prefunding of benefits, the CPP underwent reforms in 1998 that trimmed benefits and ramped up contribution rates. These reforms reflected a number of economic and political tensions in the plan.