If you are one of the 2.2 million beneficiaries of the Quebec Pension Plan (QPP), know that your pension will be increased by 6.5% as of next January, thanks to indexation.
This “juicy” indexation of 6.5% will thus improve the various pensions of the Quebec Pension Plan by a total sum of $1 billion.
To benefit from these pensions, I remind you that a person must have contributed enough to the Québec Pension Plan for him or his relatives to be able to receive said benefits.
Average increases
Compared to the various average annual pensions currently paid, here are the increases that this indexing represents for 2023:
- Retirement pension: + $423 (from $6,503 to $6,926)
- Surviving spouse’s pension: + $297 (from $4,575 to $4,872)
- Disability pension: + $739 (from $11,376 to $12,115)
- Orphan’s pension: + $201 ($3091 to $3292)
It is important to remember here that these are amounts relating to average annual pensions. This suggests that pensioners who have contributed to the maximum during their working life receive significantly higher pensions.
Maximum rises
Here is the amount of the annual increase to which annuitants eligible for the maximum pension will be entitled, depending on the age at which they began to withdraw their QPP pension:
- At age 65 (100% of the maximum pension): + $978 (from $15,043 to $16,021)
- At age 60 (64% of the maximum pension): + $625 (from $9,628 to $10,253)
- At age 70 (142% of the maximum pension): + $1,389 (from $21,361 to $22,750)
Turning now to the other maximum benefits, here are the increases planned for the year 2023:
- Disability pension: + $1,142 (from $17,566 to $18,708)
- Orphan’s pension: + $206 ($3,174 to $3,380)
- Surviving spouse’s pension ages 45 to 64: + $775 ($11,917 to $12,692)
- Surviving spouse’s pension age 65 or over: + $582 ($8,960 to $9,542)
QPP funding
Funded from contributions paid by employees and employers, the Quebec Pension Plan had a solid reserve of $105 billion at the end of 2021.
Last year, the QPP collected $17.7 billion in contributions from its 4.2 million members while it paid out $16 billion in benefits to its 2.2 million beneficiaries of various pensions.
As you can see, the QPP does not even have to draw on its reserve to pay benefits to its beneficiaries.
As other financial sources that allow the QPP to increase its reserve year following year, there is of course the annual return brought to it by the Caisse de depot et placement du Québec.
In its 56-year history, the QPP has recorded performance losses only eight times. Last year, the QPP returned a return of 15.9%.
