Balancing work and retirement
For workers in the last phase of their working life, the Québec Pension Plan provides measures to guide them progressively toward retirement.
As of age 60, workers who made sufficient contributions can draw a retirement pension under the Québec Pension Plan and continue to work on a part-time or full-time basis.
Retirement pension supplement
Workers who are already receiving a retirement pension under the Québec Pension Plan and who work must contribute to the Plan once their earnings exceed the 3 500 $ basic exemption.
These contributions entitle workers to an increase in their retirement pension: the retirement pension supplement. No application needs to be filed because the Régie will automatically pay it.
- The supplement is added to the person's pension for the rest of his or her life.
- The supplement is payable as of 1 January of the year following the one in which the person made contributions.
- The total supplement for the year is 0,5% of the earnings on which he or she contributed during the previous year.
- The pension increases even if the person is already receiving the maximum regular pension payable.
- The pension continues to increase on a yearly basis as long as the person continues to make contributions.
Even if the supplement is payable as of 1 January, it usually takes a few months before the Régie receives from Revenu Québec the information required to calculate it. The Régie will pay the amounts owing retroactive to 1 January.
Louise is receiving a retirement pension of 750 $ per month. This year, her employment earnings are 22 700 $. She contributes to the Plan based on employment earnings of 19 200 $ (22 700 $ minus the basic exemption of 3 500 $). On 1 January of the following year, Louise will be entitled to a supplement of 8 $ a month (19 200 $ x 0,5% = 96 $ a year) because of the contributions she made. If she continues to work in the following years, new supplements will be added to her pension for each year worked.
Workers who are receiving a retirement pension under the Canada Pension Plan
and who work in Québec could receive a retirement pension supplement under the Québec Pension Plan (QPP). If workers contribute to the QPP, the Régie
will automatically pay them the supplement without them having to apply for it. The amount will be equal to 0,5% of the earnings on which they contributed to the QPP in the previous year.
Agreement on contributions to the Québec Pension Plan during phased retirement
Employees 55 years of age or over (but under age 70) can work less while contributing just as much.
One cannot receive a retirement pension under the Plan before age 60. However, at age 55, workers can reduce their work hours while continuing to contribute to the Plan as if their pay had not been reduced. That means that their future retirement pension would not be reduced. To take advantage of phased retirement, your employer must be willing to reach an agreement with you for that purpose.
A worker's conditions of employment or the provisions of a company pension plan may not allow him or her to reach an agreement on contributions during phased retirement. The worker should ask the employer whether an agreement is possible in his or her case.
Note that phased retirement is not available to self-employed workers. However, the owner of an incorporated business who contributes to the Québec Pension Plan as an employee can take phased retirement.
The Régie offers on request an online service that workers can use to obtain a simulation of the effects of an agreement on contributions during phased retirement.