What happens to your CPP if you relocate?

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Question from readers

Hi Editor, I am considering relocating to the US after I get my Canadian citizenship as there are more opportunities in the US to grow my career. However, I am curious to know what will happen to my four-year pension contribution when I leave Canada. I don’t plan to return to Canada until retirement, which is still tentative. Thanks, MS.

Editor’s response

Hi MS, this is a good question, and I assure you that you’re not alone in your relocation consideration. Statistics show that several immigrants relocate to another country after a few years in Canada. According to the Canada Revenue Agency (CRA), “an individual that has contributed to the Canada Pension Plan (CPP) and meets the eligibility requirements is eligible to receive CPP benefits, regardless of their citizenship or current country of residence – including temporary foreign workers. In the case of the CPP retirement pension, all individuals who have made even one contribution to the CPP can receive the monthly CPP retirement pension when they reach the age of eligibility. Likewise, an individual who worked in Canada and contributed for multiple years may also meet the contributory requirements for the CPP survivor’s pension or a death benefit.”

The pension amounts under the CPP are based on the amount and duration each individual contributed. As a result, if you contributed for only a few years, you will only receive a small retirement income from your CPP. You have to plan for your retirement and consider whether you’ll be eligible for retirement income in the country you plan to relocate to, or you’ll need an alternate retirement income, as your CPP may not be sufficient to live on at retirement.

CPP benefits payments do not begin automatically. You must apply for your CPP payments when you are ready to start receiving them upon your retirement or when you reach the minimum retirement age of 60.

Canadian permanent residents, citizens or those whose citizenship was approved on their last day of residence in Canada and are at least 65 years old might qualify for the Old Age Security (OAS) pension payments if they meet the minimum residence requirement. Applicants who live in Canada require at least ten years of proof of Canadian residence after the age of 18 to qualify for a partial OAS pension. For applicants who reside abroad, a minimum of 20 years of proof of Canadian residence after the age of 18 is required to qualify for a partial OAS pension. If you were initially eligible for OAS pension as a permanent resident but relocated abroad, you may continue to receive a pension provided that you had lived in Canada for 20 years before the date you relocated. However, if you do not meet the 20 years criteria, you can only receive OAS pension for the month of your departure and the next six months after, provided you meet the 10-year residence requirement.