Quebec Pension Plan, Quebec City, could institute the same enhancements that have been approved for the C$300.5 billion ($227.9 billion) Canada Pension Plan, Ottawa.
In a consultation paper presented by Quebec Finance Minister Carlos Leitao in the province’s National Assembly on Dec. 8, three options for changing the C$57 billion Quebec pension fund were presented:
- Matching the CPP enhancement, which is increasing the income replacement rate of retirement pensions to 33% from 25%;
- Increasing QPP benefits only for individuals whose employment income exceeds C$27,450; and
- Maintaining the QPP as currently established.
Matching CPP’s enhancement would also mean increasing the maximum annual earnings cap to C$62,600 from the current C$54,900, and provide a tax deduction instead of the current tax credit for employee contributions into the enhanced portion of CPP.
The consultation paper also said the QPP is considering raising the retirement age in Quebec from the current age of 60, though it does not suggest a new retirement age, and whether it should index pension benefits to the consumer price index in Quebec instead of the current Canadian CPI.
Quebec does not participate in the CPP, instead operating its own pension plan. QPP assets are managed by the C$254.9 billion Caisse de Depot et Placement du Quebec, Montreal.
The consultation paper, “Strengthening the Plan to Promote Greater Intergenerational Fairness,” does not prescribe any direction the QPP should take, but according to a statement on the QPP website, “The Quebec Pension Plan must be adapted to ensure a high-powered public plan for Quebeckers that will continue to meet their needs and respect intergenerational fairness. The public is therefore invited to participate in a shared discussion and to comment on the proposed improvements and measures to protect future generations of retirees and to strengthen the sustainability of the plan.”
The consultation paper is available on the QPP website.