Retirement rendez-vous - Chronicle N°11

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What should you expect from the public pension plans?

We often hear people approaching retirement talking of their “pension.” Some appear to have great hopes for their pension and have great projects in mind: “When I retire,….” But how much income are we really talking about? How much is this famous pension worth, at least in the case of public pension plans?

Charles de Kovachich: Investment Advisor


There is good reason to ask yourself exactly how much income you can expect from these plans. Many workers ask themselves this question at one point or another, and in order to be able to plan effectively, you need to know this information.


You are eligible for retirement pensions from both levels of government, under certain conditions. Benefits may vary according to your income, the contributions you have made to the plans and the age at which you retire, among other things. To give you a basic idea, we will now take a brief look at the maximum amounts currently being paid out by these plans.


In 2011, the Québec Pension Plan (QPP) is making monthly payments to beneficiaries equal to 25% of their average monthly earnings on which they contributed, up to $960, if they asked for their pension when they turned 65. The pension may therefore be reduced or increased, depending on the age at which the beneficiary asks for it.


The Old Age Security (OAS) pension is paid by the Government of Canada to Canadians 65 years of age or older. In October 2011, the maximum monthly amount paid out under the OAS was $537.97. People with a total income under $16,320 also have access to the Guaranteed Income Supplement, up to an amount of $729.44 if they are single, widowed or divorced.


Many people, upon seeing these amounts, will realize that the income guaranteed by the public pension plans will not be enough for them to maintain their current lifestyle in retirement. The situation is particularly critical for individuals who do not have an employer pension plan and for self-employed workers.


So you would be well advised to find out what amounts you can receive at retirement as soon as possible. Then you will be able to make the necessary adjustments to your plans and develop a real action plan for meeting your retirement objectives.




Charles de Kovachich

Investment Advisor

National Bank Financial

Organizations: Retirement chronicle National Bank

Geographic location: Canada

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