Public Pensions and Work
1995 to 2003
A growing proportion of workers (more so women than men) are choosing to collect benefits from the Canada Pension Plan / Quebec Pension Plan (CPP/QPP) at the age of 60, according to a new study. However, an aging workforce means that an increasing number of older Canadians are continuing to work, some even after they begin to collect their CPP/QPP pension benefits.
The study "Public pensions and work," published today in Perspectives on Labour and Income, uses income tax records to profile new CPP/QPP pensioners in their 60s and the extent to which they continue to work after starting to receive benefits. In 1995, 32.5% of men and women had chosen to take their CPP/QPP benefits at the age of 60. By 2003, this proportion had increased to 36.4%. The increase was greater for women, among whom the proportion increased from 31.1% to 37.8%.
The study found that income from an existing employer-sponsored registered pension plan (RPP) tended to generate a pent-up demand for employees to take CPP/QPP benefits early. Nearly four out of every five RPP beneficiaries who had no employment in 2002 began receiving CPP/QPP benefits at the age of 60 in 2003. This was the highest rate of all groups. Individuals who were working and not collecting RPP benefits were much less likely to begin their CPP/QPP benefits at the age of 60.
The study found that a substantial and increasing proportion of CPP/QPP beneficiaries did some work for pay the year following their retirement. For example, in 1995, 39.8% of men who had started receiving a CPP/QPP pension had earnings. By 2004, this proportion had increased to one-half (49.9%). Among their female counterparts, the proportion rose from 37.7% to 45.8%. The incidence of paid work rose much faster among CPP/QPP beneficiaries than it did among those who didn't receive a pension.
The study found that even individuals who had received RPP benefits at the age of 59, and did not work, were increasingly finding their way back into paid jobs during their 60s. It also found that CPP/QPP coverage alone was not enough to retire on.
The incidence of continuing employment was highest, and increased the most, for individuals without RPP benefits or RPP coverage in the year prior to starting CPP/QPP benefits. Their situation indicated relatively weak retirement resources, so it is not surprising that many continue to work after starting CPP/QPP benefits.
The article "Public pensions and work" is now available in the August 2007 online edition of Perspectives on Labour and Income, Vol. 8, no. 8.
For more information, or to enquire about the concepts, methods or data quality of this release, contact Ted Wannell, (613-951-3546; firstname.lastname@example.org), Labour and Household Surveys Analysis Division.