Rapport actuariel modifiant l'Analyse actuarielle du Régime de rentes du Québec au 31 décembre 2009
(Actuarial update to the
Actuarial Report of the Québec Pension Plan as at 31 December 2009;
Purpose of the update
This update is further to the tabling in the National Assembly of
An Act respecting mainly the implementation of certain provisions of the Budget Speech of 17 March 2011 and the enactment of the Act to establish the Northern Plan Fund in May 2011. Its purpose is to assess the effects of the amendments provided for by the bill on the projections in the actuarial report as at 31 December 2009. Under the
Act respecting the Québec Pension Plan,, an actuarial report must be prepared when a bill proposing changes to the Plan is under study at the National Assembly.
The new bill provides for an increase to the Québec Pension Plan's contribution rate and changes to the actuarial adjustment factors for retirement pensions in the event of early or deferred retirement.
Changes to contributions
The bill provides for a progressive six-year increase in the contribution rate (0,15% a year), beginning in 2012 and reaching 10,80% in 2017. Each 0,15% increase in the contribution rate would increase total contributions to the Plan by roughly 1,5%. In 2017, at the end of the rate increase period, total contributions to the Plan will be over 1,2 billion $ higher than those calculated using the current contribution rate.
Changes to benefits
The bill provides for greater increases to the adjustment factors for early or deferred retirement pensions. Currently, pensions are adjusted by 6% a year if a person applies to receive a retirement pension before or after age 65. Under the bill, the adjustment will be 7,2% for each year before the 65th birthday of a person entitled to the maximum pension. The adjustment factor will be lower for a person receiving less than the maximum pension. It will stay at 6% for very small pensions. This change will be phased in as of 2014. For pensions applied for after age 65, the adjustment factor will be increased to 8,4% (as of 2013).
Since the number of contributors who apply for their pension before age 65 is much greater than the number of contributors who apply for their pension after age 65, the net effect is a reduction in payments. At the end of the projection period in 2060, there will be 3,4% fewer retirement pension payments.
Changes in the reserve and the steady-state contribution rate
The amendments in the bill will serve to ensure that the reserve stays positive during the projection period. Specifically, the contribution rate increase will spur stronger growth of the reserve compared with the growth foreseen in the 2009 actuarial report. A bigger reserve will generate more investment income, enabling the difference between cash outflows and contributions collected to be made up.
The measures in the bill will also reduce the steady-state contribution rate by 0,23%, compared with the rate determined in the actuarial report as at 31 December 2009. The rate will therefore decrease from 11,02% to 10,79%.
For everything you need to know...
Consult a summary of the report