The Retirement Pension of the Quebec Pension Plan
Have you created a business in Quebec and you employ people? Know that you must comply with a certain number of formalities in order to comply with the legislation in force. The Québec pension plan is one of the plans to which you and your employees must contribute if they are 18 years of age or over. This plan is akin to protection that employees can claim upon retirement. JKB Services, this consulting agency offering services related to accounting and business management in Montreal, can assist you in the steps to take in order to benefit from all the advantages emanating from this plan.
Quebec Pension Plan: Who Can Benefit From It?
The Quebec Pension Plan is intended for employers and their employees who are 18 years of age or older and who have an annual income exceeding $ 3,500. Thus, they are invited to pay a contribution during the period in which they are in activity. This rule remains valid even if the employees are 70 years of age and over or are receiving a retirement pension from the QPP or the Canada Pension Plan (CPP).
Through this plan, employees benefit from basic production resulting in an annuity if they retire, take phased retirement or become disabled. The pension is paid to his immediate families if he dies.
You should know that contributions to the Quebec Pension Plan are paid equally by employees and their employers. Employers must take care of withholding their employees' contributions from the wages they pay them and remit it with theirs to Revenu Québec. The latter then takes care of paying all contributions to Retraite Québec. They will then be entered in the register of contributors at the same time as the eligible salary.
Compliance with the payment deadline is crucial so that the contributions paid are recorded, because later, the pension will be calculated accordingly.
When is the plan contributions?
The Quebec Pension Plan derives its funding from contributions from Quebec employees and employers. These contributions are to be paid to Revenu Québec and their management is handled by the Caisse de depot et de placement du Québec.
For this year 2017, the contribution rate to the Quebec Pension Plan is around 10.80%. This rate is applied to the portion of work income between $ 3,500 and the maximum amount on which employees can contribute in 2017. This maximum amount is $ 55,300 per year.
Financial protections included in the plan
The Quebec Pension Plan gives rise to various forms of financial protection for all people who have contributed sufficiently. In certain circumstances, it is the close families of the contributor who benefit from the protections.
The protections offered depend on the situation and appear as follows:
When the contributor reaches retirement, he receives a retirement pension from the Quebec Pension Plan. This pension is available from age 60 and its amount depends on income and the length of time the employee has contributed to the Quebec Pension Plan.
Every contributor obtains a statement of participation in the Québec Pension Plan every 4 years, documents that they may need once they reach retirement age.
From the age of 65, the retirement pension paid to contributors is supplemented by the Old Age Security pension which is paid by the federal government. It can also be supplemented by other sources of income.
A supplement to the retirement pension can also be received by employees who contribute more.
In the event of disability:
In the event of disability, contributors to the Quebec Pension Plan can benefit from other forms of protection, namely:
- The disability pension;
- The child's pension for a disabled person;
- The additional amount for disability which is intended for those who benefit from the retirement pension.
The disability pension is paid to all contributors who have become disabled and who can no longer continue to practice as a professional for this purpose. If despite the disability, they can still continue to work, they still continue to receive the disability pension while continuing to contribute for their retirement.
The child's pension for a disabled person is also another form of protection. It is allocated to the children of the disabled contributor in the event that the latter could no longer meet their needs.
In the event of death:
If the contributor dies, it is his family and friends who benefit from the protections related to his status as contributor with the Quebec Pension Plan. Indeed, if an employee dies when their children are not yet financially independent, they can receive the death benefit and continue to live decently. The surviving spouse also obtains the surviving spouse's pension, an annuity that allows them to continue to ensure the future of their children and supplement their income. For orphans whose parents were contributors to the Quebec Pension Plan, they receive the orphan's pension. Thus, they continue to receive a certain amount each month, an amount that allows them to meet their needs or to supplement their ends of the month in case they have an income.
How to calculate the amounts of pensions paid in 2017?
Each year, the Quebec Pension Plan pays large amounts to contributors. These figures can be viewed in the database associated with this scheme. This database can be consulted to find out the amounts of pensions paid in 2017.
What about the situation of Quebec workers abroad?
Quebec workers who work in a foreign country can claim a retirement, disability, orphan pension or even a surviving spouse's pension paid by the country concerned. However, they must meet the following conditions:
- Practice in another country that has signed a social security agreement with Quebec;
- Be resident in Quebec.
For more information on this subject, do not hesitate to contact the accounting and tax services in Montreal from JKB Services if you want to respect a professional approach to the tax declaration.