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26 lacible | Mai 2020 FEATURE ARTICLE Apply for the QPP at 60, 65 or 70? If we look solely at people's behaviour for the age of application, Graph 33 (average age at the start of pension payments based on the year the cohort turns 60 and variations used in the sensitivity tests for the years 1985 to 2068) suggests that the trend was downward from 1985 to 1995 and has risen only slightly since then. For men, it went from 63.5 to 62 and then, starting in 2015, rose again to 62.5. Women have a slightly younger average age at application, by about half a year. Remember that early retirement was introduced in January 1984. Furthermore, in 2014, downward pressure was observed when the QPP eliminated the requirement of having stopped working in order to apply for retirement benefits before age 65. What is the best age to apply for the QPP (once you have stopped working)? This is a question that comes up quite frequently. Are retirees, who tend to apply for it before the age of 65, making the right choice? The answer is "of course!" ... if these benefits are their biggest source of retirement income or if their health is precarious. But the sensitivity analysis in Table 59 shows that delaying the age of application is costly to the plan, which means it is probably beneficial for the retiree, in monetary terms. For every three months of average age that the application is delayed, the effect on the steady-state rate is +0.04%. I really like the way it is described on page 142 of the QPP document: the effect of shortening the average term of payment is lower than the effect of increasing the average amount of the pension benefits; in other words, the total amount paid in pension benefits increases. This is a clue that should inspire some people to delay their application for benefits. In the CPP's 30th Actuarial Report, Table 79, Retirement Pension Take-Up Rates (2021+), projects that only 27% of men and 29.5% of women will apply for their pension at age 60, compared to 46% of men and 54% of women for the QPP (Table 36, take-up rate and average age at start of pension payment for cohorts who turn 60 during the projection period, by sex). The behaviour of people in the rest of Canada is very different from Quebecers, who are more likely to apply at age 60. As for delaying past the age of 65, the numbers are similar for both plans: very low. Life expectancy The IQPF and FP Canada Standards Council Projection Assumption Guidelines discuss survival probabilities, explaining, for example, that life expectancy is longer for wealthier people. In the QPP analysis, Table 20 (life expectancy, with mortality reduction after the stated year, by age and sex – 2019, 2043 and 2068) can be used as fuel in a discussion, but it only illustrates the average (50% survival rate). The table shows an upward trend based on the expected reduction in mortality. In 2019, a 65-year-old man has a life expectancy of 21.0 years, while it is 23.5 for a woman. In 2068, however, a man born in 2003 who retires at 65 will have 24.0 years ahead of him, on average (26.1 for a woman). According to the Retraite Québec analysts, life expectancy has not progressed as much in the short term as had been anticipated, but they are still confident about the long term. The authors also say that an even higher life expectancy is projected for the beneficiaries who receive the biggest pensions.

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