Régie des rentes du Québec

Finding out about different the types of plans

Are you employed and thinking about joining a pension plan? The following summary of the different types of plans shows how they could provide you with a retirement income.

Defined contribution plan

Your income at retirement depends on the amount that has accumulated in your account.

  • The amount of required contributions is determined in advance.
  • The amount of your income at retirement depends, among other things, on:
    • the total amount credited to your account
    • the interest rate in effect at the time a retirement annuity is purchased
      or
      interest rates on life income funds (LIF).
  • The risks related to fluctuations in the rate of return are assumed by the members.

Defined benefit plan

You know the amount of your retirement pension in advance.

  • The amount of required contributions is determined by an actuary during the actuarial valuation.
  • The amount of the retirement pension generally corresponds to a percentage of your pay multiplied by the years of credited service under the plan.
  • The risks related to the plan's funding are assumed primarily by the employer.

Simplified pension plan

Your income at retirement depends on the amount accumulated in your accounts. You decide how the amounts in your accounts will be invested.

  • The amount of required contributions is determined in advance.
  • Two accounts are created for each member: one is locked-in and the other is not locked-in.
  • The amount of your income at retirement depends, among other things, on:
    • the total amount accumulated in your accounts
    • the interest rate in effect at the time a retirement annuity is purchased or
      interest rates on life income funds (LIF).
  • The risks related to fluctuations in the rate of return on accounts are assumed by the members.

Other useful link...

Flash Retirement Québec

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