The Québec Pension Plan and the balance between work and retirement

Are you thinking about retiring, but are not quite ready to leave the job market? Why not consider making the transition from working life to retirement gradually?

The Québec Pension Plan provides 3 measures that allow you to benefit from the financial advantages and flexibility of balancing work and retirement:

• early retirement for workers aged 60 to 65;
• the retirement pension supplement for retirees aged 60 and over who work;
• phased retirement under the Québec Pension Plan for workers aged 55 to 70.

Early retirement

Under the Act respecting the Québec Pension Plan, normal retirement age is 65. This is the age at which you can receive the entire pension amount that you have accumulated based on your contributions. But what happens if you want to work less before age 65?

You can receive an early retirement pension as early as age 60 if you meet one of the following two conditions:

• for the 12 months following the beginning of your pension, you expect that your earnings will not exceed 11 800 $ (maximum income for 2010)
• you are an employee and have reached an agreement with your employer to reduce your hours by at least 20% in view of retirement. You salary must be reduced by at least 20%.

An early retirement pension is less than a regular pension. It is reduced by 0,5% a month for each month before your 65th birthday.

The retirement pension supplement

Are you already receiving your pension under the Québec Pension Plan? Did you know that you can work and continue to receive it? You will have to start contributing to the Québec Pension Plan once your employment earnings exceed the basic exemption of 3 500 $. The contributions will result in an increase in your retirement pension: the retirement pension supplement.

If you are entitled to the supplement, the Régie will pay it to you automatically. You do not have to apply for it.

• The supplement will be paid to you as of 1 January of the year following the one in which you made contributions. For each year, it will equal 0,5% of the earnings on which you contributed during the previous year.
• The supplement will be added to your pension for the rest of your life, even if you are already receiving the maximum pension payable each month.
• Your pension will continue to increase each year as long as you continue to make contributions to the Plan.

Phased retirement under the Québec Pension Plan

Are you an employee between ages 55 and 70? Even though you cannot receive your retirement pension under the Québec Pension Plan before age 60, as of age 55 you can reduce your work hours while contributing to the Plan as if your salary had not been reduced. And don't worry, the change will not reduce the amount of the retirement pension you will eventually receive.

However, in order to take advantage of this measure, you must make an agreement with your employer. The Régie offers a service that simulates the effects of phased retirement. If this service interests you, ask the Régie.

For more information

Visit the section of our Web site on phased retirement.