Do you ever wonder how much you will receive from Canada Pension Plan and Old Age Security? It’s a question that likely has entered more conversations in the last few years as public pensions have come under greater scrutiny.
Knowing your public pension allows you to more effectively set your private savings goals and retirement spending expectations. Of course CPP and OAS will always be subject to occasional modification, but such changes are almost always incremental in nature. Accordingly, the best estimate of future entitlement is the current system, with the proviso to revisit periodically.
There are two linked government resources that enable you to use your own historic data and future intentions for this purpose. This month’s article features CPP management with your My Service Canada Account. [Footnote] Next month, we’ll see how that information is combined with OAS and private savings in the Canadian Retirement Income Calculator.
Accessing My Service Canada Account
For starters, sign-up.
While the service is free, one must obtain password access by registering on the Service Canada website. For security, an initial password is sent by Canada Post to your address on record with the government. You will have a chance to confirm the address, so if it is incorrect then you can call and speak to someone, but otherwise it can be done online.
CPP earnings and contributions
In my case, I’m a decade or two away from starting CPP and OAS, so my personal interest is to take a peek at my CPP contribution history.
A table shows all calendar years in which you made contributions (ie., paid CPP premiums) and the amount of pensionable earnings upon which those were based. There are notations in respective years where you were [B] below the basic exemption, contributing at the [M] maximum, [S] self-employed, and where a [CS] credit split with a spouse may have applied. There is even a new notation for [P] post-retirement benefits, being the credit that applies beginning in 2012 for premium contributions made when receiving a retirement pension while continuing to work.
If you want to obtain a printed official statement, you can order it online. On the other hand, if you disagree with the record then there are instructions as to necessary documentation and procedure you can take to correct any errors.
Estimating monthly CPP benefits
Now here’s the fun part.
With a couple clicks, you can get a quick estimate of your CPP retirement pension in current dollars if you were 65 and began your pension today. Though this may be a simplistic way to express it, in fairness it is easier to understand than to show an indexed amount years or decades into the future. Alternatives are also offered for retirement commencing early at 60 or late at 70, based on the respective 0.6% and 0.7% monthly adjustments that will be fully implemented by 2016.
Of further practical reference are the figures for the CPP disability pension and related amounts for dependent children. Finally (literally), there is a summary of the type and amounts available on death for lump sum payment, survivor spouse and dependent children.
If you want to go further to integrate the pension figure with other retirement savings and income sources, the site provides a hyperlink to the Canadian Retirement Income Calculator. That’s next month’s column.
——-
[Footnote]: The service is also a central communications hub for applications, claims, monitoring and general information on Employment Insurance. For this article however, the focus is on Canada Pension Plan.