Pension Information

[ceriserose 1]

This thread has been started as a result of comments on another thread about losing pension eligibility when one emigrates. I had heard different things about pensions than stated in the other thread, so decided to put on my sleuthing hat to figure out exactly what the deal is with these various pensions. This information is specific to Canadian citizens who move to the US and reside as permanent residents.

When speaking to the agents on the phone, I used myself as an example (so K1-AOS, intention to reside in US permanently & full time).

CPP

Canada Pension Plan (CPP) is a contributory pension, which means that you pay into it when you work, and how much money you receive as pension after you stop working is based on what you contributed.

General info on CPP Link: http://www.sdc.gc.ca/asp/gateway.asp?hr=en...html&hs=cpr

From that site:

Can I receive CPP payments outside Canada?

Yes, provided you meet all eligibility conditions, payments are made anywhere in the world.

My question to the agent was "what is required for eligibility"?

His response was that eligibility was based on having made "at least one good contribution" into the CPP system. He then defined "one good contribution" as 1 year of valid contribution. I asked if Canadian citizens who were eligible based on that but then became permanent residents of the US were still eligible for receiving the pension at the correct age. His answer was yes.

OAS

Unlike CPP, Old Age Security (OAS) is based on residency, specifically number of years resident after the age of 18. If you are a Canadian citizen remaining in Canada, the criterion is 40 years residency over the age of 18 (age 58). If you are a Canadian citizen who leaves Canada the criterion is 20 years residency over the age of 18 (age 38). However, as a result of the tax treaty between Canada and the US, a Canadian permanently residing in the US who doesn't meet the 20 years residency criterion may collect a partial OAS based on the years they -did- reside in Canada over the age of 18.

The agent on the phone stressed that to be able to collect this pension you had to prove the date you left Canada, be it by a plane ticket, moving company documents, visa, passport, etc. He indicated that even though it may be a lot of years away, keeping that information is critical to collecting.

General info on OAS Link: http://www.sdc.gc.ca/asp/gateway.asp?hr=en...html&hs=ozs

Corporate/Individual Pensions

You're on your own! smile.gif If you have a separate pension through a former employer, find out what their rules are with regard to collecting.

I know I can collect mine in the US, and that it is subject to the 25% non-resident withholding tax. Chances are, any non-government administered pension would be subject to that tax, but that is only an educated guess by me. hehe

Taxes on Pensions

The good news is, in the case of CPP and OAS, it's 0%. I verbally confirmed what I read on this website with both the agent at the international tax number (1-800-267-5177) and the agent from Service Canada who gave me all the CPP/OAS answers (1-877-454-4051).

NR4 form info on pensions Link: http://www.sdc.gc.ca/asp/gateway.asp?hr=en...html&hs=cpr

Non-resident Tax on Pensions Link: http://www.sdc.gc.ca/en/isp/pub/nontax.shtml

Of course, it's still income per the IRS.

Additional Links

Contact info for all pensions by type Link: http://www.sdc.gc.ca/asp/gateway.asp?hr=en...html&hs=ozs

Contact Income Security Link: http://www.sdc.gc.ca/asp/gateway.asp?hr=/e...html&hs=cpr

General publication for Canadians retiring abroad Link: http://www.voyage.gc.ca/main/pubs/retirement_abroad-en.asp

edited: It killed my links. Can't hyperlink them in edit.

Edited July 20, 2006 by ceriserose

[Jersey Girl 2]

Thank you for doing the digging and putting the facts in plain language. Perhaps there's a permanent place this information can reside, as a resource for Canadians living in the States.