Changes made to the Québec Pension Plan

As of 1 January 2024, changes made to the Québec Pension Plan (QPP) will be in effect. The purpose of the changes is to increase the financial security of the population. They also favour job retention for people aged 65 and over.

Allowing workers aged 65 and over who are already receiving their retirement pension to stop contributing to the QPP

Currently, a person who is working must contribute to the QPP, even if he or she is already receiving his or her retirement pension. His or her employer is also contributing to the Plan. A person's contributions and his or her employer's  contributions therefore grant entitlement to a retirement pension supplement. This supplement is paid for life and indexed, thus adjusted each year based on the cost of living. It is therefore generally advantageous to continue contributing to the QPP after age 65. However, many workers who are already receiving their retirement pension would like to stop contributing to this plan. They would rather benefit from having more money in the short term than benefit from a supplement in the long term.

As of 1 January 2024, workers aged 65 and over who are already receiving their retirement pension will be able to stop contributing to the QPP. If a person chooses to stop contributing to the Plan, the contributions made by his or her employer will also cease. On 1 January of each year, workers who turned 72 at the end of the previous year will automatically stop contributing to the QPP.

Protecting the pension amount after age 65 thanks to a new calculation

The calculation of a pension under the QPP varies based on employment earnings on which contributions were made. The employment earnings are taken into account from the time a person turns 18 until the month preceding the one during which he or she begins receiving his or her retirement pension. When a person decides to apply for his or her pension after age 65, the period used to calculate the pension amount is longer. However, at this time, the average earnings used to calculate his or her pension could be lower. That is the case for a person with employment earnings that are lower or nil after age 65.

As of 1 January 2024, low earnings after age 65 will no longer lower the average earnings used to calculate the retirement pension. Therefore, this measure will benefit people who would like to work part-time after age 65. It will also allow retirees to begin receiving their pension later.

Extending the maximum age at which a person can begin receiving a pension under the QPP to age 72

The normal retirement age provided for under the QPP is 65. If a person applies for his or her retirement at that age, he or she receives 100% of the expected monthly payments, depending on his or her situation. When a person applies for his or her pension after age 65, the pension is higher, for life. Therefore, it is generally advantageous to apply for a pension at age 65 or later, especially for people who are in good health. Currently, the maximum age at which a person can begin receiving his or her pension under the QPP is 70. This means that the pension amount remains the same after age 70, even if a person applies for a pension later.

As of 1 January 2024, a person will be able to apply for his or her pension at age 72 at the latest. He or she will therefore receive a higher pension than he or she would have been entitled to if he or she had applied at age 70. For example, a person who would be entitled to the maximum pension and who applies for his or her pension at age 72 would receive a $2751 higher pension per year for life, compared to the $23 252.76 pension he or she would have received at age 70. Any person interested by this option will be able to apply as of 1 January 2024.