For many Canadians, the Canada Pension Plan retirement benefit represents a significant part of their anticipated monthly retirement income—in some cases, the majority of that income. And, consequently, knowing what to expect in the way of CPP retirement benefits is crucial to an individual’s retirement income planning.
What’s not so clear to probably the majority of Canadians is how to find out just what they can expect to receive each month from the Canada Pension Plan. A summary of what CPP benefits are (or will be) available to a particular individual can be found on that individual’s CPP Statement of Contributions. However, while the federal government used to mail a Statement of Contributions to each contributor to the CPP annually, that’s no longer the case. In order to obtain one’s CPP Statement of Contributions, it is necessary to request a copy from the federal government, by telephone, mail, or online, as follows:
- a telephone request for a Statement of Contributions is made by calling Service Canada at 1-800-277-9914;
- a paper copy of an Application for Statement of Contributions—Canada Pension Plan can be obtained online at http://www.hrsdc.gc.ca/cgi-bin/search/eforms/index.cgi?app=profile&form=isp2000&lang=e or by calling 1-877 454-4051 to request that the application form be sent by mail; or
- to view and print an individual’s Statement of Contributions online, on the Service Canada Web site, it is necessary to first request a Service Canada access code at http://www.servicecanada.gc.ca/eng/online/pac/pacinfo.shtml. That access code, which is sent to the individual by mail, can then be used to obtain online access to information about a number of federal government benefits, including CPP benefits.
It is apparent that, whatever the method used, it takes a few weeks before a Statement is obtained.
Once the Statement of Contributions is obtained, however, the recipient will have all the information needed to determine his or her CPP entitlement. There are three sections to the statement. The first outlines the individual’s name, the address that Service Canada has on file for that individual, the individual’s date of birth, and the date that the Statement of Contributions was prepared. That last date is important because, as additional contributions are made in successive years by the individual to the Canada Pension Plan, the amount of benefits receivable will change. The second section of the statement outlines the contributions made by the individual to the CPP and pensionable earnings received each year since the age of 18, which is the first year that contributions can be made. There is generally a lag time before contributions made show up on the Statement of Contributions—for instance, a Statement of Contributions issued during 2012 will likely show contributions made up until the end of 2010.
The third section of the Statement of Contributions is the one in which the amount of CPP benefits which may be received are summarized. And, while the CPP is generally thought of primarily as a source of retirement income, there are in fact three types of CPP benefits: the retirement benefit, the disability benefit (payable, as the name implies, to individuals who have contributed to the CPP but are no longer able to work because they have a severe and prolonged disability) and, finally, survivor benefits, which are paid to surviving relatives of a CPP contributor who has died.
The summary of retirement benefits shows, firstly, the amount of CPP benefits which would be payable to the individual if he or she were 65 years old at the time the Statement was prepared (remembering that that amount can change, depending on the amount of CPP contributions made in future years). That figure is followed by two figures, showing the amount of benefit which would be receivable by the same individual if he or she was to apply to receive the CPP retirement benefit at the earliest possible age of 60, or was to defer that application until the latest possible age of 70. The earlier the CPP retirement benefit is received, the lower the monthly benefit amount payable. For example, a person who, as of 2012, can receive a monthly CPP retirement benefit at the age of 65 of $821 per month would receive $545 per month if that benefit started at age 60 and $1,167 if receipt of the benefit was deferred to age 70. Under changes to the CPP announced in 2011, the “gap” between those figures will be increasing over the next few years, and those who elect to begin receiving CPP retirement benefits before the age of 65 will see those benefits reduced to a greater degree than is currently the case.
Where an individual who has contributed to the CPP dies, his or her surviving spouse or common law partner is generally entitled to receive CPP survivor benefits. In order for survivor benefits to be payable, the individual must have contributed to the CPP for at least three years and, where the time period during which he or she made contributions (the “contributory period”) is more than nine years, the individual must have contributed for at least one-third of those years, or for ten years, whichever is less.
The amount of survivor’s benefit payable is determined by both the amount of contributions made by the deceased contributor and by the age and circumstances of the surviving spouse or common-law partner. Continuing with the individual example above, a surviving spouse or partner of that individual who is aged 65 or over could receive a survivor’s pension of $493 per month. Where the surviving spouse or partner is aged 45 to 65, or is under the age of 45 but has dependent children or is disabled, the monthly survivor benefit amount is reduced slightly to $482. Further reductions in the survivor benefit occur where the surviving spouse or partner is under the age of 45 but does not have dependent children and is not disabled. Finally, dependent children of a CPP contributor are entitled to receive a monthly survivor’s benefit until the age of 18, or up to age 25 if they remain full-time students.
The amounts contributed by an individual to the Canada Pension Plan throughout his or her working life determine the amount of CPP benefits which will be payable to that individual later in life. Consequently, it’s important to ensure that the contribution information on file with the federal government, as well as the personal information like birth date, address, and the like, is accurate and up-to-date. The birth date information on the CPP Statement of Contributions is the one registered on the individual’s Social Insurance Number record. If that information is incorrect, the individual should contact the Social Insurance Registration Office at 1-800-206-7218 to determine how to correct it. Where there is an error on the Statement of Contributions with respect to CPP contributions made or the amount of pensionable earnings received, it is necessary to write to the Canada Pension Plan, providing supporting documentation for the needed correction. The address to which such correspondence is sent can be found on the back of the Statement of Contributions form.
Finally, the federal government provides a great deal of information on its Web site with respect to the Canada Pension Plan and Canada’s retirement income system generally. A good starting point is the Service Canada Web site at http://www.servicecanada.gc.ca/eng/isp/cpp/cpptoc.shtml.
