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Retirement Planning

Pension planning or arrangements in Canada are made up of government pension programs, employer-sponsored programs, and personal savings.

Personal retirement planning could include contributions to an employer-sponsored Registered Pension Plan (RPP), Registered Retirement Savings Plans (RRSPs), RRIFs, profit and savings plans, investment income, personal savings, or home ownership.

Government pension programs include Old Age Security (OAS) and Guaranteed Income Supplements (GIS), which are financed out of general tax revenues, and the Canada Pension Plan/Quebec Pension Plan (CPP/QPP), which are financed by employee and employer contributions.

Eligibility for old age security pension (OAS) is determined by age and residence. Generally, an individual is eligible for a full OAS pension if he or she is at least 65 years old and has resided in Canada for 40 years. A partial OAS pension is available to people who have an aggregate minimum of 10 years residency. There is, however, a significant exception to the general 40-year rule and a special “Deemed Residency” rule for missionaries.

Eligibility for a CPP payment is based on a person having made at least one valid contribution to CPP for at least one year and having reached age 60.  Employers must deduct CPP contributions from an employee’s remuneration, subject to some limited exceptions.  An employer must deduct CPP contributions from the pensionable earnings of employees even if they are currently receiving a CPP retirement pension, if they are:

- 60 to 65 years old; or
- 65 to 70 years old and have not submitted to the employer a signed and completed Form CPT30.

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