Pensions in Canada can be public, private, and collective, or come from individual savings.
The Canada Pension Plan (CPP) forms the basic state pension system. All those employed aged 18 or older must contribute a portion of their income to a pension plan. In all provinces and territories except Quebec, these plans are administered by Employment and Social Development Canada, while Quebec administers them separately with the Quebec Pension Plan (QPP). Upon retiring, a contributor receives regular CPP pension payments equal to 25% of the earnings on which CPP contributions were made over the entire working life of a contributor from age 18 in constant dollars. Adjustments are made according to the Consumer Price Index. Although one can claim a CPP pension at age 60 rather than the typical retirement age of 65, as of 2016, those who claim it at 60 have their pension reduced by 36%.
Canada also maintains the Registered Retirement Savings Plan, which maintains personal accounts for holding savings and investment assets.
In addition to the public pension system, some employers maintain private pension plans for their employees. Investments into these plans are not subjected to taxation until retirement. Private pension plans are subjected to various regulations among the provinces and territories, and must be registered with the authorities.
- ^Service Canada. Canada Pension Plan Retirement Pension (booklet – March 2014), ISPB-147-03-14E.
- ^Service Canada. Canada Pension Plan Retirement Pension (booklet – March 2014), ISPB-147-03-14E
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder of TBIL.co STATX Fund.