All You Need to Know About Pension Plans: How Many Are There in Canada?

1. Public Pension Plans in Canada:

The Canada Pension Plan (CPP):

A social insurance plan funded by the contributions of employees, employers and self-employed people as well as the revenue earned on CPP investments.

Provides retirement, disability, and survivor benefits to eligible individuals, including federal employees.

Who is qualified for CPP retirement pension?

Be at least 60 years old,

and

have made at least one valid contribution to the CPP.

Please be advised that valid contributions can be either from work you did in Canada, or as the result of receiving credits from a former spouse or former common-law partner at the end of the relationship.

Québec Pension Plan (QPP):

Similar to the CPP but specific to the province of Quebec

The Old Age Security (OAS):

A basic pension to seniors to help ensure a minimum level of income in retirement to assist individuals who are 65 years of age and older, regardless of their work history or contributions to the program. In other words, OAS is a federal initiative designed to provide financial support to eligible Canadian seniors.

Who is eligible for OAS?

You must be a Canadian citizen or a legal resident of Canada.

To qualify for the full OAS pension, you generally need to have lived in Canada for at least 40 years after the age of 18.

Partial benefits may be available for those who have lived in Canada for at least 10 years but less than 40 years.

Please be advised that higher-income individuals may receive reduced benefits.

Guaranteed Income Supplement (GIS):

A federal program designed to provide additional financial support to low-income seniors receiving OAS benefits.

Allowance and Allowance for the Survivor:

Additional benefits for seniors aged 60-64 who are the spouse or common-law partner of an OAS pensioner, or who are widowed.

Available to those who meet income and residency requirements.

2. Employer-sponsored plans (defined benefit and defined contribution)

Defined Benefit Pension Plans (DB):

Provides a guaranteed pension amount based on a formula based on years of service and salary.

Several employers such as many large corporations and government entities offer DB to their employees.

Defined Contribution Pension Plans (DC):

Provides a pension based on contributions made by the employee and employer, and investment returns on those contributions.

Many private sector organizations offer DC to their employees.

3. Public Sector Pension Plans

Public Service Pension Plan (PSPP):

The PSPP is a defined benefit pension plan specifically for federal public service employees, including

those in the Canadian Forces,

the RCMP,

and

federal employees.

PSPP provides retirement income based on a formula considering years of service and salary, and it is intended to provide a pension for federal employees. The combined total contribution to the PSPP includes both the employee's and the employer's (government's) portions, making the total contribution split roughly 50/50.

Ontario Teachers' Pension Plan (OTPP):

A defined benefit plan for teachers in Ontario that is available to teachers and other educational staff in Ontario.

Québec Public Sector Pension Plans:

Includes various plans such as the Régime de rentes du Québec (RRQ) and pension.

4. Personal and Supplemental Plans

RRSP

TFSA

RRIF

More Info

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