Pensions are a crucial aspect of retirement planning for Canadians, offering financial security once individuals retire. These plans ensure a steady income, helping you maintain a comfortable lifestyle in your later years. Since pension plans are heavily regulated, they allow you to make calculated contributions and effectively map out your retirement strategy. However, with various pension plans available, selecting the one that best aligns with your financial goals can be challenging.
In this article, we’ll explore the top 10 pension plans in Canada, highlighting their key features, benefits, and fund managers. This guide will help you make informed decisions and provide insights for retirement planning consultants to share with clients seeking financial security.
Table of Contents
1. Canada Pension Plan (CPP)
Fund Manager: Canada Pension Plan Investment Board (CPPIB)
AUM: $593.8 billion (March 2024)
Contributors and Beneficiaries: Over 21 million
The Canada Pension Plan (CPP) is one of the most important pillars of Canada’s public retirement system. Alongside the Old Age Security (OAS), the CPP offers income replacement for those who retire, die, or become disabled. All Canadian workers over the age of 18 and earning over $3,500 annually must contribute to the CPP. The CPPIB manages the CPP funds and boasts an impressive $593.8 billion in assets under management. Additionally, the CPPIB is ranked number one in Canada and second globally in the pension transparency benchmark.
2. Québec Pension Plan (QPP)
Fund Manager: Caisse de dépôt et placement du Québec (CDPQ)
AUM: $434 billion (December 2023)
Contributors and Beneficiaries: Approximately 6.4 million
Similar to the CPP, the Québec Pension Plan (QPP) provides a basic retirement income for workers in Québec. The benefits include coverage for death and disability. Both the QPP and CPP are structured similarly, with the primary distinction being that the QPP serves employees in Québec. The CDPQ manages the QPP and handles a range of other public pension funds in the province.
3. Public Service Pension Plan (PSPP)
Fund Manager: Public Sector Pension Investment Board (PSPIB)
AUM: $264.9 billion (March 2024)
Contributors and Beneficiaries: Over 34 million
The Public Service Pension Plan (PSPP) is tailored for federal public sector employees. It ensures a reliable income upon retirement or if an individual becomes disabled. The PSPP also provides benefits to surviving spouses and children upon the member’s death. The plan offers various pension options depending on when the employee leaves the public service. The PSPIB, responsible for managing the assets, is one of Canada’s largest investment managers with a global footprint.
4. British Columbia Public Service Pension Plan (BC Pension)
Fund Manager: British Columbia Investment Management Corporation (BCIMC)
AUM: $250.4 billion (March 2024)
Contributors and Beneficiaries: More than 2.7 million employees and beneficiaries
The BC Pension Plan offers public sector employees in British Columbia lifetime monthly pensions upon retirement. It also provides retirement health coverage and disability benefits for employees who are unable to work. The plan includes a death benefit for families, ensuring comprehensive support for contributors and their families. The BCIMC manages the pension plan’s assets, serving over 2.7 million employees across the province.
5. Ontario Teachers’ Pension Plan (OTPP)
Fund Manager: Ontario Teachers’ Pension Plan Board
AUM: $247.5 billion (December 2023)
Contributors and Beneficiaries: Around 40,000 contributors and 310,000 members
The Ontario Teachers’ Pension Plan (OTPP) is one of the largest pension plans in Canada, providing lifetime pensions to active and retired teachers in Ontario. The OTPP also offers benefits to family members in the case of death, disability, or when the teacher leaves before retirement. The OTPP is jointly sponsored by the Ontario government and the Ontario Teachers’ Federation, with an independent board managing its investments.
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6. Alberta Public Service Pension Plan
Fund Manager: Alberta Investment Management Corporation (AIMCo)
AUM: $160.6 billion (December 2023)
Contributors and Beneficiaries: Over 375,000 active and retired members
The Alberta Public Service Pension Plan offers retirement income to employees of the provincial government, including employees from universities and corporations. In addition to death and disability benefits, the plan provides early retirement options. AIMCo, which manages a diverse range of public funds, administers the Alberta pension funds, supporting more than 375,000 members across various sectors.
7. Ontario Municipal Employees Retirement System (OMERS)
Fund Manager: In-house investment professionals
AUM: $128.6 billion (December 2023)
Contributors and Beneficiaries: More than 1,000 employers, 500,000 members
OMERS is one of Canada’s largest defined benefit pension plans, providing retirement benefits to employees of Ontario’s municipalities, local boards, and public utilities. The plan also offers supplemental pension options for police officers, firefighters, and paramedics. OMERS is known for its strong investment management, helping workers save for a secure retirement.
8. Healthcare of Ontario Pension Plan (HOOPP)
Fund Manager: In-house investment professionals
AUM: $112.6 billion (December 2023)
Contributors and Beneficiaries: More than 670 employers, 460,000 members
The Healthcare of Ontario Pension Plan (HOOPP) provides retirement benefits to employees in Ontario’s healthcare sector. With over 670 participating employers, HOOPP covers hospital staff, healthcare workers, and community health providers. This pension plan offers early retirement options, survivor benefits, and inflation protection. Notably, 80% of the pension payout comes from investment returns.
9. Ontario Public Service Pension Plan
Fund Manager: Ontario Pension Board (OPB)
AUM: $31.7 billion (December 2023)
Contributors and Beneficiaries: Around 41,000 active members
The Ontario Public Service Pension Plan provides retirement income to employees of the Ontario government. Like other public service pension plans, it also includes death and disability benefits. The OPB manages the pension funds, ensuring that contributors can rely on the plan throughout their retirement.
10. OPSEU Pension Plan
Fund Manager: OPSEU Pension Trust (OPTrust)
AUM: $25 billion (December 2023)
Contributors and Beneficiaries: Around 106,000 members
The OPSEU Pension Plan serves employees in bargaining units represented by the Ontario Public Service Employees Union (OPSEU) and other eligible members. This defined benefit plan integrates with the Canada Pension Plan, offering reliable retirement income and benefits for plan members.
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Choosing the Right Pension Plan
Selecting the right pension plan is essential for ensuring a financially secure retirement. By understanding the features, benefits, and asset management strategies of these top Canadian pension plans, you can make an informed decision. Whether you’re contributing to the Canada Pension Plan or considering a more specialized provincial or sectoral pension plan, this guide provides the insights you need to secure your future. Share this guide with your clients if you’re a retirement planning consultant, helping them navigate their pension options for a comfortable retirement.
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