As every year, but particularly in 2022 due to the rise in the cost of living, the Québec Pension Plan (QPP) has occupied an important place in the finances of retirees. For most of them, it is the only indexed pension plan, with the exception of the federal Old Age Security program.
From the beginning of 2023, a public consultation on the QPP will take place, an exercise carried out every six years. At Réseau FADOQ (Federation of the Golden Age of Quebec), we are aware that an in-depth reflection on this public system is necessary. But a few lines of thought contained in the consultation document presented by the Minister of Finance, Eric Girard, are of great concern to us.
Minister Girard is considering raising the minimum age of eligibility for the QPP retirement pension from 60 to 62 and increasing the penalties for those who withdraw their pension before the age of 65.
These two measures would disproportionately harm people who are forced to stop working before the age of 65, despite their good will, for various health reasons.
I am thinking here of people who have worked all their lives in a difficult work environment, whose tasks prematurely exhausted their abilities due in particular to extreme temperatures, considerable physical effort, unsuitable working positions, physical or mental stress and many others.
There are also workers who have had health problems, cancer for example, an accident, or a loss of capacity. Or caregivers who are forced to take early retirement to be able to assist a parent or loved one in the illness.
For these people, it is impossible to prolong their career. By withdrawing their pension before age 65, they would see it reduced by 0.6% per month. A person who withdraws it at age 60 would lose 36% monthly compared to his full pension at age 65, for the rest of his life. In 2022, this penalty represents more than $5,500 annually for an individual in this situation.
Workers who have to retire prematurely are already experiencing a significant loss of income despite their contributions to the QPP throughout their careers. Do not penalize them further when it is a situation beyond their control.
The Réseau FADOQ sincerely hopes that the decisions made following the public consultation will be beneficial for everyone. The goal should always be to improve the quality of life of all retirees.
Other measures to reduce the labor shortage
However, it is clear that the Quebec Pension Plan can play a more important role in retaining workers at a time when Quebec is in the throes of a labor shortage.
During the last election campaign, Prime Minister François Legault notably promised to make QPP contributions optional for all employees aged 65 and over.
If the Government of Quebec wants to look to the QPP to act in the face of this shortage, it must quickly materialize this commitment.
Combined with other measures, this powerful financial incentive would be attractive to those workers who want and can still extend their careers beyond retirement age.
The modification of the tax credit for career extension in order to make this fiscal measure refundable and thus accessible to less affluent citizens is also desirable.
In closing, I take this opportunity to wish everyone a happy new year. In 2023, I aspire to a society that will make the fate of seniors a priority. Let’s stick together and take care of each other.