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Canada Pension Plan (R.S.C., 1985, c. C-8)

Full Document:  

Act current to 2024-02-06 and last amended on 2023-06-22. Previous Versions

PART IIPensions and Supplementary Benefits (continued)

DIVISION BCalculation of Benefits (continued)

Retirement Pension (continued)

Marginal note:Amount of average monthly pensionable earnings

 Where a retirement pension becomes payable to a contributor commencing with any month before January, 1976, his average monthly pensionable earnings are an amount calculated by dividing his total pensionable earnings by the basic number of contributory months.

  • R.S., c. C-5, s. 47

Marginal note:Average monthly pensionable earnings in case of pension commencing after December, 1975

  •  (1) Subject to subsections (2), (3) and (4), where a retirement pension becomes payable to a contributor commencing with any month after December, 1975, his average monthly pensionable earnings are an amount calculated by dividing his total pensionable earnings by the total number of months in his contributory period or by the basic number of contributory months, whichever is the greater.

  • Marginal note:Deductions in calculating average monthly pensionable earnings of certain months during child raising years

    (2) In calculating the average monthly pensionable earnings of a contributor in accordance with subsection (1) for the purpose of calculating or recalculating benefits payable for a month commencing on or after January 1, 1978, there may be deducted

    • (a) from the total number of months in a contributor’s contributory period, those months during which he was a family allowance recipient and during which his pensionable earnings were less than his average monthly pensionable earnings calculated without regard to subsections (3) and (4), but no such deduction shall reduce the number of months in his contributory period to less than the basic number of contributory months, except

      • (i) for the purpose of calculating a disability benefit in respect of a contributor who is deemed to have become disabled for the purposes of this Act after December 31, 1997, in which case the words “the basic number of contributory months” shall be read as “48 months”,

      • (i.1) for the purpose of calculating a disability benefit in respect of a contributor who is deemed to have become disabled for the purposes of this Act in 1997, in which case the words “the basic number of contributory months” shall be read as “24 months”, and

      • (ii) for the purpose of calculating a death benefit and a survivor’s pension, in which case the words “the basic number of contributory months” shall be read as “thirty-six months”; and

    • (b) from his total pensionable earnings, the aggregate of his pensionable earnings attributable to the months deducted pursuant to paragraph (a).

  • Marginal note:Deductions allowed where contributory period ends after age 65

    (3) Where a contributor’s contributory period ends after the month preceding the month in which he reaches sixty-five years of age and the total number of months in his contributory period remaining after the deduction under paragraph (2)(a) exceeds the basic number of contributory months, in calculating his average monthly pensionable earnings in accordance with subsection (1) there shall be deducted

    • (a) from the total number of months remaining in his contributory period, the number of months therein after he reached sixty-five years of age or by which the total exceeds the basic number of contributory months, whichever is the lesser; and

    • (b) from the contributor’s total pensionable earnings remaining after the deduction under paragraph (2)(b), the aggregate of the contributor’s pensionable earnings for a number of months equal to the number of months deducted under paragraph (a), for which months that aggregate is less than — or, if not less than, then equal to — the aggregate of the contributor’s pensionable earnings for any other like number of months in the contributor’s contributory period other than for months for which a deduction has already been made under subsection (2).

  • Marginal note:Deductions allowed where number of months remaining exceeds 120

    (4) Where the number of months remaining after making any deduction under subsection (2) or (3) from the total number of months in the contributory period of a contributor exceeds one hundred and twenty, in calculating his average monthly pensionable earnings in accordance with subsection (1) there shall be deducted

    • (a) from the number of months remaining, a number of months equal to the lesser of

      • (i) subject to subsection (5), if the retirement pension or other benefit becomes payable commencing with a month before January 2012, fifteen per cent of the number remaining — and sixteen per cent commencing with a month after December 2011 and before January 2014 and seventeen per cent commencing with a month after December 2013 — and, if that per cent includes a fraction of a month, the fraction shall be taken to be a complete month, and

      • (ii) the number of months by which the number remaining exceeds one hundred and twenty; and

    • (b) from the contributor’s total pensionable earnings remaining after making any deduction under subsection (2) or (3), the aggregate of the contributor’s pensionable earnings for a number of months equal to the number of months deducted under paragraph (a), for which months that aggregate is less than — or, if not less than, then equal to — the contributor’s aggregate pensionable earnings for any like number of months in the contributor’s contributory period other than for months for which a deduction has already been made under subsection (2) or (3).

  • Marginal note:Exception — same percentage

    (5) The percentage used in a calculation of the amount of average monthly pensionable earnings under subsection (4) is to be used in the calculation of other benefits based on that amount.

  • R.S., 1985, c. C-8, s. 48
  • R.S., 1985, c. 30 (2nd Supp.), s. 16
  • 1997, c. 40, s. 70
  • 2009, c. 31, s. 34
  • 2012, c. 31, s. 196

Marginal note:First additional monthly pensionable earnings

 The first additional monthly pensionable earnings of a contributor are an amount calculated by

  • (a) in the case where their first additional contributory period is less than or equal to 480 months, dividing their total first additional pensionable earnings by 480; or

  • (b) in the case where their first additional contributory period exceeds 480 months, dividing the aggregate of their 480 highest first additional pensionable earnings for a month by 480.

  • 2016, c. 14, s. 22

Marginal note:Second additional monthly pensionable earnings

 The second additional monthly pensionable earnings of a contributor are an amount calculated by

  • (a) in the case where their second additional contributory period is less than or equal to 480 months, dividing their total second additional pensionable earnings by 480; or

  • (b) in the case where their second additional contributory period exceeds 480 months, dividing the aggregate of their 480 highest second additional pensionable earnings for a month by 480.

  • 2016, c. 14, s. 22

Marginal note:Contributory period

 The contributory period of a contributor is the period commencing January 1, 1966 or when he reaches eighteen years of age, whichever is the later, and ending

  • (a) where a benefit other than a disability pension commences before the end of 1986, when he reaches sixty-five years of age, or if he makes a contribution for earnings after he reaches sixty-five years of age, with the month for which he last made such a contribution, and in any case not later than the month in which he dies, or

  • (b) where a benefit other than a disability pension or a post-retirement disability benefit commences after the end of 1986, with the earliest of

    • (i) the month preceding the month in which he reaches seventy years of age,

    • (ii) the month in which he dies, or

    • (iii) the month preceding the month in which the retirement pension commences,

but excluding

  • (c) any month that was excluded from the contributor’s contributory period under this Act or under a provincial pension plan by reason of disability, and

  • (d) in relation to any benefits payable under this Act for any month after December, 1977, any month for which the contributor was a family allowance recipient in a year for which the contributor’s base unadjusted pensionable earnings were equal to or less than the contributor’s basic exemption for the year.

  • R.S., 1985, c. C-8, s. 49
  • R.S., 1985, c. 30 (2nd Supp.), s. 17
  • 2016, c. 14, s. 23
  • 2022, c. 10, s. 417

Marginal note:First additional contributory period

 The first additional contributory period of a contributor is the period commencing January 1, 2019 or when they reach 18 years of age, whichever is the later, and ending with the earliest of

  • (a) the month preceding the month in which they reach 70 years of age,

  • (b) the month in which they die, and

  • (c) the month preceding the month in which the retirement pension commences.

  • 2016, c. 14, s. 24

Marginal note:Second additional contributory period

 The second additional contributory period of a contributor is the period commencing January 1, 2024 or when they reach 18 years of age, whichever is the later, and ending with the earliest of

  • (a) the month preceding the month in which they reach 70 years of age,

  • (b) the month in which they die, and

  • (c) the month preceding the month in which the retirement pension commences.

  • 2016, c. 14, s. 24

Marginal note:Total pensionable earnings

 The total pensionable earnings of a contributor are the total for all months in his contributory period of his pensionable earnings for each month calculated as provided in section 51.

  • R.S., c. C-5, s. 50

Marginal note:Total first additional pensionable earnings

 The total first additional pensionable earnings of a contributor are the total for all months in their first additional contributory period of their first additional pensionable earnings for each month calculated as provided in section 51.

  • 2016, c. 14, s. 25

Marginal note:Total second additional pensionable earnings

 The total second additional pensionable earnings of a contributor are the total for all months in their second additional contributory period of their second additional pensionable earnings for each month calculated as provided in section 51.

  • 2016, c. 14, s. 25

Marginal note:Pensionable earnings, or first or second additional pensionable earnings, for month

  •  (1) The pensionable earnings, first additional pensionable earnings or second additional pensionable earnings, as the case may be, of a contributor for a month (in this subsection referred to as the “particular month”) are an amount determined by the formula

    A × B

    where

    A
    is
    • (a) in the case of pensionable earnings, earnings for which the contributor is deemed by section 52 to have made a base contribution for the particular month;

    • (b) in the case of first additional pensionable earnings, earnings for which the contributor is deemed by section 52.1 to have made a first additional contribution for the particular month, except in the case where the contributor is considered to be disabled for the purposes of this Act or a provincial pension plan during the particular month, for the calculation of a pension or benefit other than a disability pension, the greatest of the following amounts:

      • (i) the value determined in accordance with section 51.1 multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12,

      • (ii) the highest of any value determined in accordance with section 51.1 for any of the 72 months before the month in which the contributor was deemed to have become disabled, multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12, and

      • (iii) the earnings for which the contributor is deemed by section 52.1 to have made a first additional contribution for the particular month; or

    • (c) in the case of second additional pensionable earnings, earnings for which the contributor is deemed by section 52.2 to have made a second additional contribution for the particular month except in the case where the contributor is considered to be disabled for the purposes of this Act or a provincial pension plan during the particular month, for the calculation of a pension or benefit other than a disability pension, the greatest of the following amounts:

      • (i) the value determined in accordance with section 51.2 multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12,

      • (ii) the highest of any value determined in accordance with section 51.2 for any of the 72 months before the month in which the contributor was deemed to have become disabled, multiplied by the Year’s Maximum Pensionable Earnings for the year that includes the particular month, divided by 12, and

      • (iii) the earnings for which the contributor is deemed by section 52.2 to have made a second additional contribution for the particular month; and

    B
    is
    • (a) where the contributor was born after December 31, 1932 and the contributor’s retirement pension did not commence before January 1, 1998 and, after the contributor’s 60th birthday, a month was excluded from the contributor’s contributory period by reason of disability, the product determined by the formula

      (C/D) × (E/F)

      where

      C
      is the contributor’s Maximum Pensionable Earnings Average for the year in which a benefit first became payable to the contributor under this Act or a provincial pension plan that caused a month after the contributor’s 60th birthday to be excluded from the contributor’s contributory period by reason of disability,
      D
      is the Year’s Maximum Pensionable Earnings for the year that includes the particular month,
      E
      is the Pension Index for the year in which a benefit becomes payable to the contributor under this Act or a provincial pension plan, and
      F
      is the Pension Index for the year referred to in the description of C, and
    • (b) in any other case, the ratio

      G/D

      where

      G
      is the Maximum Pensionable Earnings Average in respect of the contributor for the year in which a benefit becomes payable to the contributor under this Act or under a provincial pension plan, and
      D
      is as described in paragraph (a).
  • Marginal note:First additional pensionable earnings — 2019 to 2022

    (1.1) Despite subsection (1), the first additional pensionable earnings of a contributor for a month are an amount calculated as provided in subsection (1) multiplied

    • (a) for 2019, by 0.15;

    • (b) for 2020, by 0.3;

    • (c) for 2021, by 0.5; and

    • (d) for 2022, by 0.75.

  • Marginal note:Exception

    (2) For the purposes of subsection (1), in the case of pensionable earnings, if the year referred to in the description of C is 1987 or earlier, the Maximum Pensionable Earnings Average for the year is calculated as if the Year’s Maximum Pensionable Earnings for a particular year before 1986 were calculated as the greatest multiple of $100 that is equal to or less than an amount calculated by multiplying the Year’s Maximum Pensionable Earnings for 1986, which are $25,800, by the ratio

    A/B

    where

    A
    is the average for the twelve month period ending on June 30 of the year preceding that particular year of the average weekly wages and salaries of the Industrial Composite in Canada as published by Statistics Canada for each month in that period, and
    B
    is the average for the twelve month period ending on June 30, 1985 of the average weekly wages and salaries of the Industrial Composite in Canada as published by Statistics Canada for each month in that period.
  • Marginal note:Pension Index before 1974

    (3) For the purposes of subsection (1), in the case of pensionable earnings, if the beginning of a period that is excluded from the contributor’s contributory period by reason of disability is in a year before 1974, in calculating the Pension Index for the year in which that period begins, paragraph 43.1(2)(a) of the Canada Pension Plan, R.S.C. 1970, c. C-5, as amended by section 24 of chapter 4 of the Statutes of Canada, 1974-75-76, is to be read without reference to the words “or 1.02 times the Pension Index for the preceding year, whichever is the lesser”.

  • R.S., 1985, c. C-8, s. 51
  • R.S., 1985, c. 30 (2nd Supp.), s. 18
  • 1997, c. 40, s. 71
  • 2016, c. 14, s. 26
  • 2018, c. 12, s. 373
 

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