Common menu bar
Archived - Annual Report of Canada Pension Plan 2002-2003
Archived Content
Information identified as archived on the Web is for reference, research or recordkeeping purposes. It has not been altered or updated after the date of archiving. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, please contact us to request an alternate format.
Benefits and Expenditures
The number of people receiving CPP benefits has increased steadily over the past decade. To pay for these benefits, expenditures have also increased. Figure 1 shows the yearly increases since 1999-2000. Figure 2 shows the percentage of CPP expenditures by type of benefit.
Retirement Pensions
Retirement pensions represent 66 percent of the total number of CPP benefits paid and 70 percent of the total benefit dollars paid out by the CPP in 2002-03. The amount of each contributor's pension depends on how much and how long he or she has contributed and at what age he or she begins to draw the benefits. In March 2003, the monthly maximum retirement pension was $801.25; the average payment was $447.18.
The CPP offers flexibility with respect to the age of retirement. Seniors can take their pension as early as the age of 60 or as late as 70. The CPP permanently reduces the pension by 0.5 percent per month for those who take their benefit before their 65th birthday, reflecting the fact that these seniors will, on average, receive their benefit longer than someone who retires at the age of 65. For those who take their benefit after their 65th birthday, the CPP permanently increases the pension by 0.5 percent per month, reflecting the fact that these seniors will receive their benefit for a shorter amount of time on average. The adjustments are intended to ensure that there is no advantage or disadvantage from taking the retirement benefit at a particular age. The Chief Actuary of the Canada Pension Plan completed a study on this issue in March 2003.
The study is available at http://www.osfi-bsif.gc.ca/osfi/index_e.aspx?ArticleID=497.
Disability Benefits
Disability benefits, paid to eligible contributors and their children, represent 9 percent of the total number of CPP benefits paid and 14 percent of the total benefit dollars paid out by the CPP in 2002-03. In March 2003, the maximum monthly disability benefit was $971.26; the average payment was $729.61. The children's monthly benefit was a flat rate of $186.71.
Survivor Benefits
Survivor benefits, paid to the surviving spouse or common-law partner of the contributor and his/her dependent children, represent 23 percent of the total number of CPP benefits paid and 15 percent of the total benefit dollars paid out by the CPP in 2002-03. The amount of the monthly survivor benefit varies depending on a number of factors, including the age of the spouse or common-law partner at death and whether the beneficiary also receives other CPP benefits.
FIGURE 1 - BENEFITS AND EXPENDITURES BY FISCAL YEAR
Death Benefits
Death benefits represent 2 percent of the total number of CPP benefits paid and 1 percent of the total benefit dollars paid out by the CPP in 2002-03. The death benefit is a one-time payment. The maximum payable is $2,500; the average payment in March 2003 was $2,201.49.
Other Provisions
The CPP includes provisions that compensate for periods of low earnings, namely the child-rearing drop-out provision (CRDO) and the 15 percent general drop-out provision. The CRDO allows the CPP to drop up to seven years of low or zero earning (due to child rearing) from the calculation of a contributor's CPP disability, survivor and/or retirement benefit. The 15 percent general drop-out provision is for low or zero earning years and applies to all contributors. The Plan has other provisions under which married or common-law spouses may either share their pension (if the union is intact), or split their credits (if the union has dissolved). If you wish to know more about these, see our contact information on the inside front cover of this report.
FIGURE 2 - PERCENTAGE OF BENEFIT DOLLARS PAID FOR 2002-2003
