By 
Pensions are definitely a political “hot potato” in most countries in the world as population demographics change with an increase in the number of retired citizens. Canada is no exception, as private pension plans are being promoted to alleviate the Canadian governments’ pension scheme that many analysts believe it will not be able to cope with in the future. Please note that all pension payments are classified as income and will be subject to standard tax rules. Using the services of a professional financial planner will allow you to plan your retirement income in the most tax efficient way.
There are 3 levels of pensions:
Old age security
The most basic level of state pension is Old Age Security payments. This is available as a monthly payment for most people over the age of 65.
Canada Pension Plan (CPP)
Once you are working in Canada, your paychecks will show deductions for CPP up to a set annual limit (approximately $ 1800) (Quebec has its own system). The amount you pay is based on 2 limits and your type of employment (self-employed or employed). The lower limit is frozen at $ 3,500 and the maximum limit (adjusted each year), currently $ 40,500; You will only pay a percentage of the income between these limits. If you make $ 100,000 a year, you won’t pay more into the plan than someone with $ 50,000 a year. These payments will allow you to receive benefits from the plan in the event you become disabled or retire and, if you die, from your surviving family members.
RRSP
To encourage Canadians to save for retirement, the government has granted significant tax breaks to people who pay in Registered Retirement Savings Plans (RRSPs). The plans are sponsored by the government but run privately with management fees charged by the companies that offer them. All capital gains from the plan are protected tax-free for as long as the plan is in effect. Any cash withdrawn during retirement is reported as income on your annual tax return.
There are annually adjusted limits on the amount you can contribute to your RRSP. This is 18% of your “Canadian” salary from previous years up to a maximum of $ 14,500. This is where being an immigrant becomes a pain. Basically, you will not have an allowance for the first calendar year that you live in Canada, so any payments you make will be considered an excess contribution. You can get away with a contribution of $ 2000 in excess, but on top of that you will be taxed. If your employer pays in a company plan that is a benefit to all employees, you will not be penalized, just be careful with voluntary payments.
There are special rules governing the use of RRSP funds. Some plans are locked and therefore inaccessible until the plan matures. Most RRSPs are not locked and are therefore available for withdrawal prior to plan expiration, although penalties and conditions will apply.
Many couples choose to use a spousal RRSP. If one partner earns substantially more than the other, this is an immediate tax exemption by giving the highest paid partner part of the other person’s allowance. The retirement income is divided equally between the two, which will reduce the tax paid.
The normal retirement age is 65, although you can work beyond that. Before age 69, you will have several options.
Before you go (for newcomers)
Most likely, you have pension plans in the country you are going to, be it private or state. This can make a big headache go away.
The first thing to do is make sure you have up-to-date information on all the pensions you may be entitled to and that these plans have your most recent contact details. Most pensions will be paid only if the plan holder contacts THEM. You need to make sure you have the contact details and let them know that you are moving to Canada.
Check and get written confirmation that the pension plan will pay to a Canadian bank account; otherwise you will have to make alternative arrangements
For state pensions, Canada has social security agreements with many different countries regarding qualifying time for state pensions, so check them out to see if it helps you.
If you choose to transfer to a Canadian plan, check how much it will cost and if there are any additional penalties incurred as it may not be worth it. If so, make sure all the groundwork has been completed before you leave and that you have points of contact to deal with to make it a hassle-free transfer or someone to fix it if it isn’t. You cannot open a Canadian pension until you have a SIN (Social Identification Number), so you cannot do so until you have landed.