Canadian HR Reporter

CANADIAN HR REPORTER February 20, 2017 NEWS 15 In addition, on average, people in Quebec retire at an earlier age (62) than those in the rest of Canada (63), said the paper. While some older workers in the prov- ince choose early retirement, others over 60 opt to continue to work while receiving a QPP retire- ment pension. Another factor is a decline in the population aged 20 to 64 in relation to the number of people 65 and up. In 1966, there were 8.2 people aged 20 to 64 for each per- son 65 and older. By 2015, there were only 3.5, compared to four in the rest of Canada, said the paper. By 2030, there will be two peo- ple aged 20 to 64 for every person 65 and older in Quebec, com- pared to a ratio of 2.6 elsewhere in Canada, it's estimated. "Because the population of Quebec is aging more markedly, the proportion of retirement pen- sion beneficiaries is greater in the case of the QPP than in that of the CPP," said the paper. Another factor affecting the province is that average weekly pay in Quebec is lower than it is in the rest of the country. In 2015, average weekly pay in Quebec was 9.6 per cent lower than the Cana- dian average. "is means that the average in- come on which contributions are made is lower in Quebec, and this has repercussions on the reserves that these two plans build. For ben- efits to be comparable, the QPP contribution rate has to be higher than that of the CPP," it said. e two rates were the same until 2012 when the provincial government began implementing annual rate increases to deal with the plan's financial pressures. For 2017, the QPP rate is 5.4 per cent, compared with 4.95 per cent for the CPP. Beginning in 2018, an automat- ic adjustment mechanism will in- crease the QPP contribution rate by 0.1 per cent per year if needed to keep the plan in balance. e discussion paper proposes a number of options to ensure the QPP remains sustainable and con- tribution rates will be stable going forward. ey include: • Increase the minimum age to become eligible for an early QPP retirement pension. It is currently 60 years old. While the paper did not recommend a specific age, it stated that an increase in the eli- gibility age would encourage older workers to remain in the labour market longer. This would not only decrease pressure on QPP retirement pensions, it would also lead to more people 60 and over paying QPP contributions, helping to keep contribution rates stable. • Full funding of QPP ben- efit improvements. Any improve- ments in benefits would be paid for as much as possible by those who will benefit from them rather than by another generation. • Introduce a longevity factor that would reduce new pensions based on increases in life expec- tancy beyond a selected threshold. Once the government reviews the feedback it received during the consultations, it is expected to announce how it will proceed with any QPP changes. It is pos- sible the government could put forward its plan when Leitão ta- bles this year's provincial budget, expected in the spring. Sheila Brawn is the Toronto-based editor of Canadian Payroll Reporter, a sister publication to Canadian HR Reporter. WANT TO MAKE WAVES? WAVES? WAVES? WAVES? WAVES? WAVES? WAVES? WAVES? H R PA C A N H E L P A CHRP creates an ocean of opportunity. You can earn a CHRP, Canada's best-known and only national HR designation, exclusively from HRPA. A CHRP creates an ocean of opportunity. If you're an HR professional outside of Ontario, join HRPA by May 31, 2017 and keep your CHRP designation. Make Waves. www.hrpa.ca/chrp Aging population QUEBEC < pg. 14 Credit: Mathieu Belanger (Reuters) Quebec's provincial government sought public input on whether it should adopt the federal government's CPP changes, implement its own QPP proposals or leave the plan as is. For 2017, the QPP rate is 5.4 per cent and the CPP rate is 4.95 per cent.

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