Section 46 — Canada Pension Plan: Amount of retirement pension

Subject to this section, a retirement pension payable to a contributor is a basic monthly amount equal to the aggregate of 25% of their average monthly pensionable earnings, 8.33% of their first additional monthly pensionable earnings, and 33.33% of their second additional monthly pensionable earnings. Subject to this section, the portion referred to in paragraph (1)(a) of the basic monthly amount of a retirement pension payable to a former disability pension recipient in respect of whom a division under section 55 or 55.1 is approved either before or after the commencement of the retirement pension, if the division reduces the retirement pension otherwise payable, is calculated by dividing the aggregate of the portion of the basic monthly amount of the retirement pension calculated in accordance with paragraph (1)(a) that would be payable to the contributor had their base unadjusted pensionable earnings not been subject to the division, multiplied by the number of months that have been excluded from the contributor’s contributory period by reason of disability, and the portion of the basic monthly amount of the retirement pension calculated in accordance with paragraph (1)(a) that would be payable following the division, multiplied by the number of months in the contributor’s contributory period calculated in accordance with section 49 by the aggregate of the number of months that have been excluded from the contributor’s contributory period by reason of disability, and the number of months in the contributor’s contributory period calculated in accordance with section 49. Subject to subsections (4) to (6), a retirement pension that becomes payable after December 31, 1986 and before January 1, 2011 commencing with a month other than the month in which the contributor reaches 65 years of age is a basic monthly amount equal to the basic monthly amount calculated in accordance with subsection (1) or (2), as the case may be, adjusted by a factor fixed by the Minister, on the advice of the Chief Actuary of the Office of the Superintendent of Financial Institutions, to reflect the time interval between the month in which the retirement pension commences and the month in which the contributor reached, or would reach, 65 years of age, but the time interval is deemed never to exceed five years. Subject to subsections (4) to (6), a retirement pension that becomes payable after December 31, 2010 commencing with a month other than the month in which the contributor reaches 65 years of age is a basic monthly amount equal to the basic monthly amount calculated in accordance with subsection (1) or (2), as the case may be, adjusted by a factor fixed under subsection (7). Subject to subsection (5), if, as a result of a division of unadjusted pensionable earnings under section 55 or 55.1, a retirement pension that was payable increases, the adjustment factor applicable after the increase to the basic monthly amount of the retirement pension calculated in accordance with subsection (1) or (2), as the case may be, instead of the adjustment factor referred to in subsection (3) or (3.1), as the case may be, shall be determined by the formula [(F1 × P1) + (F2 × E)] / P2 where F1 is an amount equal to the adjustment factor referred to in subsection (3) or (3.1), as the case may be, at the time the retirement pension first became payable; P1 is the basic monthly amount of the retirement pension calculated in accordance with subsection (1) or (2), as the case may be, before the division; F2 is the lesser of an amount equal to what the adjustment factor referred to in subsection (3) or (3.1), as the case may be, would have been if the retirement pension had commenced in the month in which the increase commences to be payable, and 1; E is equal to the excess of P2 over P1; and P2 is the basic monthly amount of the retirement pension immediately following the division. Unless otherwise provided by an agreement under section 80, if a person receives a retirement pension under this Act and a survivor’s pension under this Act and the survivor’s pension is at any time reduced from its full amount under subsection 58(2), any downward adjustment factor resulting from the application of subsection (3), (3.1) or (4) at that time shall not be applied to the whole of the basic monthly amount of the retirement pension calculated in accordance with subsection (1) or (2), as the case may be, but only to the amount remaining when that basic monthly amount is reduced by the product obtained by multiplying the amount by which the survivor’s pension has been reduced by the ratio that the Pension Index for the year in which the retirement pension first commenced to be payable bears to the Pension Index for the year in which the survivor’s pension is reduced. If, after a person has reached 65 years of age but before the person commences to receive a retirement pension, a division of unadjusted pensionable earnings takes place under section 55 or 55.1 in respect of that person, the upward adjustment factor referred to in subsection (3) or (3.1), as the case may be, to be applied to any increase in the retirement pension that is attributable to the division shall be based on the time interval between the taking place of the division and the commencement of the retirement pension, and shall not take into account the time interval between the month in which the person reaches 65 years of age and the month in which the division takes place. For the purposes of subsection (3.1), the Governor in Council may make regulations fixing one or more adjustment factors or the methods of calculating them — including factors or methods that may apply on specified dates —

to reflect the time interval between the month in which the retirement pension commences and the month in which the contributor reached, or would reach, 65 years of age, but the time interval is deemed never to exceed five years. The Governor in Council may only make regulations under subsection (7) or repeal them on the recommendation of the Minister of Finance and only if the lieutenant governor in council of each of at least two thirds of the included provinces, as defined in subsection 114(1), having in total not less than two thirds of the population of all of the included provinces, has signified the consent of that province to the making or repeal of the regulations. Regulations made under subsection (7) may only be amended in accordance with subsection 113.1(14).