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Canada Pension Plan Guidance for Teachers

Who participates?

  • Anyone who is employed or self-employed.
  • Contributions are paid on wages or salaries above the Year’s Basic Exemption (YBE) and up to the Year’s Maximum Pensionable Earnings (YMPE).
  • Your contributions are matched by your employer.
  • Additional contributions cannot be made.
  • Revenue Canada maintains a Record of Earnings registered under your social insurance number and surname. (Changes of name must be registered or your record will not include earnings under your new surname.)
  • There is total “portability” between the CPP and the Quebec Pension Plan
  • (QPP).

Retirement pensions

  • Available at age 65, even if still employed
  • Available as early as age 60 and have ceased employment. The pension will be reduced by 7.2% per year or 0.6% for each month that the pension is taken to a maximum of 36%. This reduction begins in 2012. (The rates will rise each year up to, and including, 2016).
  • May be delayed to age 70. The pension is increased 0.7% per month over age 65 to a maximum of 42%. (The rates will rise each year up to, and including, 2016).
  • To receive a pension, you must have contributed for at least one year.

Pension calculation: 25% of your adjusted average earnings.

Adjusted average earnings is the average of year-by-year wages adjusted to reflect year-by-year increases in the industrial wage in Canada, over the contributory period. The average will not include:

  • low-earning periods spent rearing children under the age of seven.
  • low-earning months after age 65.
  • time while in receipt of a CPP Disability pension.
  • 15% of the remaining low earning years.

Contributory period is the time since January 1, 1966 (the start of the CPP) or from your 18th birthday, whichever is latest, to the month before the pension starts, or the month in which you reach age 70, or die, whichever is soonest.

  • Estimate of pension may be obtained from the nearest Income Security Programs, Client Services Centre (see attached list).
  • Benefits are indexed annually.
  • Benefits may be split with a spouse, based on the period of time you have lived with that spouse for income tax advantage. 
  • Benefits are taxable.
  • Benefits are payable anywhere in the world you reside.

Disability pension

Eligible if:

  • are considered to have a physical or mental impairment that is both severe and prolonged, making you unable to regularly pursue any substantially gainful employment
  • are under age 65
  • have not been in receipt of a CPP retirement pension for more than 12 months
  • have contributed to CPP in 6 of the last 10 years
  • the pension is a flat amount plus 75% of your retirement pension. Each dependent child (under age 18, or 25 if in full time attendance at school or university) will also receive a flat amount pension
  • the pension is paid from the fourth month of disability, but may be paid retroactively for up to one year
  • if still disabled at age 65, the disability pension will automatically revert to a retirement pension. The years during which you are in receipt of the disability pension are not included in the calculation of average earnings.

Survivor’s pension

  • is paid to your spouse upon your death.
  • must have contributed in at least one-third of the calendar years in your contributory period (minimum of three years).

Spouse may also receive own retirement pension, but the combination of the two may not exceed one full retirement pension payable to a 65-year old.

Death benefit

  • a one-time payment to your spouse or estate.
  • amount is either 10% of the YMPE, or six (6) times your monthly retirement pension, whichever is least, to a maximum of $2500.

Orphan’s pension

  • paid to your dependent child upon your death.
  • benefit is a flat amount that is adjusted annually.

Canada Pension Plan—2020 rates

1. Premium rate: Employee (% of contributory earnings) 5.25%
2. Maximum annual contributions $2,898.00
3. Yearly maximum pensionable earnings (YMPE) $58,700.00
4. Yearly basic exemption (YBE) $3,500.00
5. Retirement pension: Maximum per month
@ age 60
@ age 65
@ age 70

$752.53
$1,175.83
$1,669.68
6. Death benefit:
Lump sum
Spouse’s pension: age 65 or +
Under age 65
Orphan’s pension, per child

$2,500.00
$705.50
$638.28
$255.03
Less 1/120 for each month under 45, if not disabled or with dependent children  
7. Disability pension:
Maximum per month
Children’s pension, per

$1,387.66
$255.03
Reduced by a factor of 1/120 per month below age 45, unless disabled or with dependents.  

CPP Disability Benefits - Application assistance

Members may be able to receive assistance in the application process from:

Disability Alliance BC
204–456 West Broadway
Vancouver, BC V5Y 1R3
Phone: 604-875-0188 Fax: 604-875-9227
Web site: www.disabilityalliancebc.org
Email: feedback@disabilityalliancebc.org

In the event that claimants are denied CPP Disability Benefits, and they are required to reapply or appeal that decision, the BCTF offers assistance to those members.

 

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