Canada’s Pension System at a Glance
Knowledge for getting the most from the advinda Premium goNorthAmerica Pension & Insurance Package.
Population: 35.5 million
Pension system design
Canada’s pension system is characterized by a mixture of
- Two public pension schemes (Canada Pension Plan and Old Age Security program)
- Voluntary occupational employer-sponsored pension plans

Public pension
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Canada Pension Plan (CPP): forms the basic state pension system
- Contributory, earnings-related social insurance plan established in 1965
- Providing basic retirement income
- Contributory for all employed persons aged 18 or older
- Contributory social insurance program operating in all parts of Canada, except Quebec
- Separate Quebec Pension Plan (QPP), almost mirroring the CPP exactly: contributory earnings-related pension plan that pays benefits in the event of disability, retirement, or death; retirement age: 65
- Receipt of full CPP retirement pension at the age of 65
- Starting in 2019, CPP will be gradually enhanced (increase of retirement, disability and survivor’s pensions)
Old Age Security (OAS) program: Government of Canada’s largest pension program
- Universal basic pension/supplement aimed at poverty reduction
- Financed from Government tax revenues (no direct payment into it)
- Employment history is not a factor in determining eligibility: OAS can be received even without having worked or while still working
- Paid to Canadians aged 65 years and over with legal status and residence
- Also paid to Canadians with residence in other countries
- Residents who have lived in Canada for 40 years from age 18 or more receive a full pension; additionally residence for continuously for the 10 years immediately before the approval of OAS pension is necessary
Private occupational pensions (voluntary pension savings)
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- Voluntary private pension plans of employers for their employees
- Tax-favoured individual savings
- Voluntary schemes aimed at providing adequate retirement income (fully funded)
- Investments into these plans are not subjected to taxation until retirement, but are subjected to various regulations among the provinces and territories, and must be registered with the authorities
- In Canada 97.5% of occupational plans that are managed by pension funds are of DB type (traditional or hybrid-mixed)
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Private pension
Private pension investments equivalent to: 156.9% of GDP (2015)
Private pension assets 2015: $ 2,248,544.8 million USD (all forms of private investment with a value associated to a pension plan over which ownership rights are enforced by institutional units, individually or collectively. This indicator is measured in millions of USD; source: OECD)
Pension funds’ assets 2015: $ 1,195,695.8 million USD (assets bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits. The pension fund is a pool of assets forming an independent legal entity. This indicator is measured in millions of USD; source: OECD)
Net pension replacement rate 2014: 47.9% (individual net pension entitlement divided by net pre-retirement earnings; measures how effectively a pension system provides a retirement income to replace earnings. This indicator is measured in percentage of pre-retirement earnings by gender; source: OECD)
Sources:
Service Canada/Government of Canada – http://www.servicecanada.gc.ca
The Organisation for Economic Co-operation and Development (OECD) – http://www.oecd.org