The retirement income system in Canada is a blend of mandatory and voluntary arrangements involving individuals, employers, governments and unions.
The main sources of retirement income are:
- Employment-based pension plans (registered and non-registered) — These plans are usually established by employers or through collective bargaining and include registered pension plans and other types of retirement savings plans, such as group Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs). Savings in Life Income Funds (LIFs), Locked-in Retirement Income Funds (LRIFs) and Locked-in Retirement Accounts (LIRAs) all come from registered pension plans and the funds paid out from them must follow the regulations in the governing pension legislation. There are also unregistered supplemental pension plans that provide benefits above the income tax allowance for high-income pension plan members.
- Personal retirement savings — Personal savings may include tax-assisted arrangements such as Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs), Tax Free Savings Accounts (TFSAs), as well as non-registered savings and investments.
- Publicly-administered pension plans operated by the government — Some of the publicly administered pension arrangements available to an Ontario resident include:
- Canada Pension Plan (CPP)
- Old Age Security Program (OAS)
- Guaranteed Income Supplement (GIS)
- Guaranteed Annual Income System (GAINS)
The CPP, OAS and GIS are all administered by Human Resources and Skills Development Canada. GAINS is administered by the Ontario Ministry of Finance.