Changes to the Quebec Pension Plan (QPP)

Following the publication of the Quebec budget for 2023-2024 last March, we take a look back at the measures aimed at the Quebec Pension Plan (QPP). These measures are designed to encourage experienced workers to stay on the job longer, in order to combat labor shortages, and to ensure the financial security of Quebecers in retirement.

Please note that :

QPP contribution rates will remain the same for workers and employers. For 2023, the maximum QPP contribution for an employee will be $4,038.40, and for a self-employed worker $8076.80.
The first age of access to QPP benefits remains at 60, with no increase in penalties for early retirement.

The proposed changes to the QPP will apply as of January 1, 2024:

The government has decided to allow workers to delay the start of their QPP pension until age 72 (instead of age 70 at present). This measure will enable workers who can afford it to receive an enhanced QPP pension by postponing the payment start date. By delaying the start of their pension, workers can better manage the risks associated with retirement, such as investment returns, life expectancy and inflation. Deferring annuity payments can be beneficial for workers who continue to work into old age, or for retirees who can use their retirement savings for short-term income, knowing that their QPP annuity will be enhanced later. It is possible that this measure is only a first step, and that the maximum age will be raised to 75 in the future. However, to further encourage deferral, the government will have to analyze whether the 0.7% per month pension increase offered after age 70 is sufficient, or whether it should be increased.
Starting at age 65, workers who receive QPP benefits and continue to work will have the option of contributing or not to the plan, as is the case with the Canada Pension Plan (CPP). If a worker chooses to continue contributing, he or she will accumulate entitlement to a retirement pension supplement, and the employer will also be required to contribute to the QPP. On the other hand, if they decide to stop contributing, they will no longer be able to accumulate a pension supplement, and their employer will also be able to stop making contributions. Employers will have to set up processes to manage the choices of their employees over 65, as is already the case elsewhere in Canada. If an employee changes jobs, a new election will have to be made with the new employer.
As is also the case with the CPP, reduced working hours after age 65 will no longer affect the average earnings used to calculate the QPP pension. This measure will enable more experienced workers to remain employed, often on a part-time basis, without any negative effect on their QPP pension.
Workers will be able to stop contributing to the QPP once a year (contribution pause). However, this decision cannot be reversed until the end of the year. They can make this choice as early as the day after their 65th birthday, by completing a form and giving it to their employer. The election will take effect on the first day of the month following delivery of the form to the employer, who will be able to stop deducting QPP contributions with the first pay of the month following the request. If the worker is self-employed, the form must be submitted to Revenu Québec.
QPP contributions will cease to be deducted once the employee reaches the age of 72, instead of continuing until the end of his or her active life on the labour market. This means that on January^{1 of}each year, workers who turned 72 at the end of the previous year will automatically stop contributing to the QPP. (The same applies to the employer).

In the coming months, the government will also launch work to better recognize certain specific situations within the QPP, such as periods of disability, childcare or periods during which the worker acts as a caregiver. It will also clarify the adjustment mechanism applicable to the QPP supplemental plan in the event of a financial imbalance, and expand the role of Retraite Québec by giving it responsibility for conducting research into the financial situation of retirees and the pension system in general.

Read more on the Retraite Québec website: