Canada Pension Plan

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Introduction

The Canada Pension Plan (CPP) provides contributors and their families with retirement, disability, survivor, death and children’s benefits. It is an example of a Defined Benefit Plan. The Canada Pension Plan operates throughout Canada with one exception, the province of Quebec has their own Quebec Pension Plan (QPP) that is similar to the Canada Pension Plan.

• The retirement pension is a monthly payment available to CPP contributors as early as 60 years of age or as late as age 70.
• The disability benefit is a monthly benefit available to qualified CPP contributors and their dependent children.
• Survivor benefits are paid to a deceased contributor’s estate, surviving spouse or common-law partner and dependent children. Benefits include:

1. The death benefit – a one-time payment of $2,500 to, or on behalf of, the estate of a deceased Canada Pension Plan contributor;
2. The survivor's pension – a monthly pension paid to the surviving spouse or common-law partner of a deceased contributor. Maximum monthly benefits in 2009 are $506.38 for individuals younger than 65 and $545.25 to those over age 65.; and
3. The children's benefit – a monthly benefit in 2009 of $213.99 for dependent children of a deceased contributor.

Canada Pension Plan (CPP) - Payment Rates

Canada Pension Plan rates are adjusted every January if there are increases in the cost of living as measured by the Consumer Price Index.

Changes to the Canada Pension Plan - 2011

The following changes to the CPP will be phased in gradually between 2011 and 2016, with the first major change occurring in January 2011 for people retiring after age 65:

• Your monthly CPP retirement pension amount will increase by a larger percentage if you take it after age 65 (gradually from 2011 to 2013).
• Your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65 (gradually from 2012 to 2016).
• The number of years of low or zero earnings that are automatically dropped from the calculation of the CPP retirement pension will increase (in 2012 and 2014).
• You will be able to begin receiving your CPP retirement pension without any work interruption (starting in 2012)
• If you are under 65 and you work while receiving your CPP retirement pension, you and your employer will have to make CPP contributions. (or if you work outside of Quebec while receiving a QPP retirement pension) (starting in 2012). These contributions will increase your CPP retirement benefits (starting in 2013).
• If you are age 65 to 70 and you work while receiving your CPP retirement pension, you can choose to make CPP contributions (or if you work outside of Quebec while receiving a QPP retirement pension)(starting in 2012). These contributions will increase your CPP benefits (starting in 2013).

You will not be affected by these changes if you started receiving a CPP retirement pension before December 31, 2010, and you remain out of the work force.

Quebec Pension Plan

Quebec is the only province that has opted out of the Canada Pension Plan. The RRQ - The Québec Pension Plan is the province's pension plan. The purpose of the QPP is to provide persons who work in Québec (or have worked in Québec) and their families with basic financial protection in the event of retirement, death or disability.