Does Canada Have A Retirement/Pension Plan?

Canada is one of the few countries that provide its citizens with probably the best quality of living along with the best amenities and facilities for their citizens. People even migrate to Canada in large numbers so that they can have a better chance at earning their livelihood and improving their living standards. Even their employers, while recruiting, believe that it is an important part of their job to provide their workforce with compensation equal to their work. They also have this in mind that they need to provide their workforce with retirement benefits in return for the service they have provided to the company over the years. 

Does Canada Have A Retirement/Pension Plan

What about their retirement plan?

Yes, Canada does have a retirement/pension plan in place. Canada has made it mandatory for all its workers between the ages of 18 to 65 to contribute to their respective pension plans that are put into motion once they come of age and are about to retire, the only exception is given to the people who have an exempt status with them. According to the reports of 2019, the pension rate in Canada is 5.1% for employers and employees alike. The benefits of the pension plan become available to an employee partially at the age of 60 and then at the age of 65 or 70 the perks gradually increase permanently. 

Canadian Retirement/ Pension Plan

Established in 1966 Canadian Retirement Plan provides three-tier benefits to the beneficiaries under which they aim to provide retirements, survivor, and disability benefits. Quebec City in Canada has a retirement/pension plan of its own but it is similar to the Canadian Pension Plan (CPP) and provides similar benefits to its residents. 

Requirements to Contribute to Canadian Pension Plan (CPP)

As was stated earlier, all the workers are required to contribute to the CPP but to contribute to the Canadian Pension Plan a worker must meet the following requirement:

  • You must have applied to contribute to the CPP because there is no other way for the government to know if you want retirement/ Pension benefits or not. 
  • They must be at least 18 years of age.
  • They must earn equal to or more than 3,500 Canadian dollars per annum.

Your Required Contribution to the CPP

As already stated, you need to contribute to your CPP to enjoy the benefits that the plan has to offer by the time your retirement approaches but then how much should you contribute if the government sets any kind of rules for it? Well yes, the Canadian government has set rules and regulations in place so that every person contributing knows how much they should contribute to get the desired returns. 

If you are an employee then you must contribute half the required amount, while the other half is paid by your employer and if you are self-employed i.e., if you run a business or any other way that you earn your livelihood you must contribute the whole of your required amount on your own. 

Eligibility Criteria to Earn the CPP

You must meet the following eligibility criteria to earn the benefits from the CPP and receive payments after your retirement:

  • You must have worked in Canada for a certain period.
  • You must have at least one qualifying contribution to make you eligible for the payments.
  • You want to start receiving your payments within 12 months itself for instance if you want to start receiving benefits at the age of 65 you need to apply at the age of 65 itself. 

Other Benefits

Other than the retirement money that you get when you reach the retirement age there are some other perks that you enjoy after you have already retired are:

  • Post-Retirement Benefit
  • Disability Pension
  • Post-Retirement Disability Benefit
  • Survivor’s Benefit
  • Children’s Benefit
  • Death Benefit

Amount Received on Retirement

The amount that is received as a pension on retirement depends entirely upon the age that you want to start receiving pension amount and also upon the money that you have contributed throughout the years and how many years you have contributed the money for.

The maximum amount that you are eligible to receive on your retirement is that is if you start receiving a pension at the age of 65 as a new recipient is $1,154.58 and the average monthly amount is $679.16.


Canada has a rather extensive retirement/pension plan at a place to help its workers lead a comfortable life after their retirement, the government takes it upon itself to look after the comfort of its residents. The Canadian Pension Plan is a well laid out one where the employee and the employer contribute equally and only what has required the benefits are long term for the security of the employee’s family. 

Frequently Asked Questions:
  1. How much time does it take to process your pension application?

It takes 7 to 14 days for the online application to be processed and around 120 days for any other way of applying for CPP to be processed.

  1. What is the current rate for Quebec’s pension plan?

The current rate for the Quebec pension plan is 5.55% for all the workers, employees as well as employers.

Does Canada Have A Retirement/Pension Plan?

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