Even if everyone can see the deductions made from each pay, does everyone really know what the Québec Pension Plan (QPP) is?
The basics
The QPP is the mandatory public pension plan for all Québec workers:
- aged 18 or over;
- who earn at least $3500 a year.
As for an insurance plan, the purpose of the QPP is to provide financial security to more than 6 million workers who contribute to it. Therefore, it provides those persons and their families with basic income throughout retirement, but also in the event of disability or death.
The pension amount you will receive depends on:
- the number of years during which you contributed to the plan;
- your employment earnings for the years during which you contributed to the plan;
- the age you will be when you apply for your pension.
Interesting facts
- At age 65, you can receive 100% of the retirement pension under the QPP to which you are entitled.
- The retirement pension under the QPP increases each year because it is adjusted to the cost of living.
The enhancement of the Québec Pension Plan: for a better retirement
In 2019, an additional plan was added to the QPP. This means that you are contributing more to the plan, but also that a greater portion of your retirement income will come from there. In other words, you will benefit from a higher retirement pension.
To better understand the effects of the enhancement, let us take a fictional example of a future retiree who earned $50 000 a year during his or her career:
- Before the enhancement of the QPP, his or her pension would have been $12 500 a year.
- Thanks to the enhancement, it will be $16 700 a year.