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Pension System in Canada

Canada Pension Plan Canadian Pension System

Canada has a three-tiered pension system, made up of federal Old Age Security, the CPP, and private pension plans. In 1927 the federal and provincial governments established the first national old-age pension in Canada, the Old Age Pensions Act, which was funded jointly by the federal government and the provinces. In 1952 the Old Age Security Act shifted all funding for national old-age pensions to the federal government. With Old Age Security and the Guaranteed Income Supplement, all Canadians aged 65 or older who meet certain residency requirements can collect payments from the federal government. Old Age Security is funded by general federal revenues. Private pension plans in Canada include the Registered Retirement Savings Plan (RRSP), a program that allows Canadians to establish individual retirement savings accounts that are not subject to taxation until the money is withdrawn. In addition, private employers and unions sponsor a large number of pension plans.

In 1966 the federal government introduced the CPP. The province of Québec opted to create its own plan, the QPP, rather than join the federal plan. The CPP and QPP are closely coordinated in major respects. Contribution and benefit levels in the two plans are similar, and benefits for employees who have worked in both Québec and other provinces during their career are combined.

Canada Pension Plan in this Section: Canada Pension Plan, Pension System, Canada Pension Plan Financing and Canada Pension Plan Benefits.

Resources

Notes and References

  1. Encarta Online Encyclopedia

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  • Article Name: Pension System
  • Author: E. Encyclopedia
  • Description: Canada Pension Plan Canadian Pension System Canada has a three-tiered pension system, made up of federal Old Age Security, [...]

This entry was last updated: March 23, 2014



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