The RREGOP is certainly one of the most advantageous pension plans in Quebec.
Offered exclusively to government employees, this plan offers up to 70% of the average salary of the 5 best years of service in the form of a retirement pension. It’s still quite impressive, especially for ordinary people in the private sector who don’t have a pension fund.
But what are the specific advantages of RREGOP? How are contributions and pension benefits calculated? Is the pension indexed at retirement?
These are all excellent questions. We also realized that the majority of public servants did not understand RREGOP very well.
In this article, we present in detail everything you need to know about the RREGOP, including answers to popular questions about this plan.
We also have partner financial consultants and advisors who can help you prepare a reliable and profitable investment plan for your retirement. Just fill out our short online form to connect with them, free of charge!
What is RREGOP?
RREGOP is an acronym for the Government and Public Employees Retirement Plan.
It is the pension plan for all employees of the Quebec public service. If you work for the government in the health sector, education, or in the social services sector, you have probably already heard of RREGOP.
You will see contributions on each of your paychecks. These contributions are used to finance your retirement pension.
Here is how RREGOP works in brief in Quebec:
How does RREGOP Work?
- For each salary, the government deducts a contribution amount for the RREGOP.
- Contributions made by all public sector employees are pooled in the RREGOP Participant Fund.
- The Caisse de depot et placement du Québec invests the funds to generate profits.
- When an employee is ready to retire, he applies for his RREGOP pension, and the amount is determined according to the number of years of service and his average salary for the best 5 years of service.
RREGOP Pension Plan Benefits
The RREGOP Quebec pension plan offers solid advantages for its members. It should be noted that it is compulsory to participate in it when you have access to it. The Plan’s generous benefits make it a worthwhile investment with no drawbacks or risks.
Here is an overview of the main advantages of RREGOP:
- Plan offered to all employees of the Quebec public service
- Retirement pension of up to 70% of salary
- Fair retirement pension calculation for all
- Life annuity (no fixed term)
- Possibility of gradual or early retirement
- Guaranteed benefits/annuities (no market impact)
Let’s now look at who can contribute and participate in RREGOP.
Public health workers
Employees of the health network are covered, i.e. nurses, orderlies, technicians, etc.
Education
All employees of the education network also participate, which includes teachers, educators, staff, etc.
Civil Servants
All government officials and civil servants also participate.
Social Services
The various social service providers are also covered by the RREGOP.
RREGOP calculation of contributions in Quebec
If you participate in RREGOP, the government deducts your contribution from your salary.
How exactly is the amount determined? It varies from person to person depending on 3 factors:
- Your eligible salary
- Maximum allowable earnings
- The contribution rate
Government employees should know and understand this calculation to maximize the benefits of their pension plan, know how contributions are determined and where they go.
Below is a brief explanation of the basic calculation of the RREGOP contribution for all employees in Quebec.
9.69% x Eligible Salary – Reduction = Contributions | |
Example: Andrei works full-time and his eligible salary is $68,000. In 2024, his contributions to RRGOP are determined in the following manner | |
Eligible Salary | $68,000 |
Exemption (25% of MGA in 2024) | ( – ) $16,650 |
Portion of salary on which contributions to | $51,350 |
Contribution rate | ( x ) 9.69% |
Contributions in 2024 | $4,975.82 |
Even if Andrei pays contributions only on the $51,350, the total of his eligible salary will be used to calculate his pension. | |
How are retirement pensions calculated?
Now let’s talk about the RREGOP retirement pension. Have you rendered enough years of service, or are you 55 and over and want to apply for your RREGOP retirement pension?
How will your benefits be calculated? Good question.
First of all, it must be understood that the calculation of the RREGOP pension (annuity) is based on 2 main factors, namely:
- The number of years of service
- The average eligible salary for the 5 years of service where the salary was the highest
The pension accumulation rate is the same for everyone – 2%. Thereafter, the basic calculation essentially consists of multiplying the number of years of service by 2%, then multiplying this result by the average eligible salary.
Below you will find the method for calculating the complete basic RREGOP pension. If you wish to take early or phased retirement, you will find the method of calculation with reduction later in this article.
Method for Calculating RREGOP Pension
Number of years of service 35 |
Annuity accrual rate x 2% |
Eligible salary for 5 best years $80,000 |
Annual basic pension = $56,000 |
Monthly basic pension = $4,667 |
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Adjustment of retirement pension to the cost of living
As you know, the cost of living increases year after year. Inflation makes everyone lose purchasing power.
Without adjustment, the RREGOP retirement pension would lose purchasing power each year.
This is why the Quebec government provides for annual indexation of the RREGOP pension to take into account part of the rise in inflation.
The calculation of the RREGOP indexation is one of the plan’s flaws. It is not very generous. The pension does not increase with actual inflation but at a lower rate.
Here are the 3 methods for calculating RREGOP indexation based on the period during which you exercised your years of service.
3 calculation methods for RREGOP indexation
- For all the years worked before July 1, 1982, indexation is done according to the TAIR, ie the CPI rate.
- For the years worked between July 1, 1982 and December 31, 1999, the indexation is done according to the TAIR – 3%.
- For the years worked from January 1, 2000, indexation is based on the higher of the TAIR – 3% or 50% of the TAIR.
Example of RREGOP Indexation |
Martine was a government office worker for 30 years. She has been retired for several years and receives a pension of $48,000. |
Her years of service are distributed as follows: |
2.5 years before July 1, 1982 |
17.5 years between July 1, 1982 and December 31, 1999 |
10 years after January 1, 2000 |
The TAIR indexation rate for 2024 is 6.5%. What will be the indexation rate of her RREGOP pension in 2024? |
The calculation is done in 3 parts to follow the different calculation methods according to the distribution of years of service:
|
Taking into account the dispersion of years of service, the total amount of indexation of her RREGOP pension will be $1,800. The effective indexation rate for Martine will, therefore, be 3.80%, according to the dispersion of her years of service (1,800/48,000 x 100 = 3.75%).
What is the best age to apply for your RREGOP pension?
When is it possible to apply for RREGOP pension in Quebec? In fact, there are 3 criteria to be able to apply for your full RREGOP pension without reduction.
You must meet one of the following 3 criteria:
- Be 61, regardless of years of service
- Have at least 35 years of service, regardless of age
- Be at least 60 years old and reach the 90 factor (age + years of service)
With that said, it is possible to apply for an early retirement pension with reduction from the age of 55. This means that even if you have not accumulated 35 years of service, you can obtain your pension but you will be penalized by 0.5% per month. If you retire at 55, the maximum penalty is 36% between 55 and 61.
Below you will find an example of an early pension reduction to show you how it works.
Calculation of the reduction percentage for anticipation of RREGOP | |
Month of anticipation | 72 |
Monthly pension reduction rate | x 0.5% |
Percentage of reduction applicable to the pension | 36% |
Calculation of the basic retirement pension | |
Recognized years of service | 22 |
Annuity accrual rate | X 2% |
Average eligible salary of the 5 years of service (where the salary is the highest) | X $90,000 |
Annual basic pension | $39,600 |
Calculation of the retirement pension WITH REDUCTION | |
Annual basic pension | $39,600 |
Reduction percentage | 36% |
Reduction applicable to the annual basic pension | $14,256 |
Reduced basic pension | $25,344 |
What are the rules following the death of a pensioner?
What happens when an RREGOP pensioner dies? Is his pension transferable to the spouse?
What rules should you know about death and RREGOP?
The options will vary depending on whether the person died before retiring, or after retirement.
If the person died BEFORE retiring:
- If the person was under age 55, the surviving spouse would receive the actuarial value of the deferred pension they acquired.
- The total of her contributions to the pension plan, plus accrued interest.
- If the person is 55 or over at the time of death and eligible for an immediate pension, the surviving spouse will receive a lifetime surviving spouse’s pension of 50% of the pension that would have been payable.
If the deceased filed for retirement shortly before death:
In the event of death, the surviving spouse will receive a lifetime surviving spouse’s pension corresponding to 50% or 60% of the pension that the deceased was receiving, depending on the option that the latter had chosen at the start.
It is important to find out and speak with a tax professional about this if you have any questions or concerns. Our partner advisors can answer your questions about the rules surrounding RREGOP.
Rules about RREGOP phased retirement
Is it possible to apply for phased or gradual retirement when working in the public sector while benefiting from RREGOP?
The answer is yes. But there are some rules to follow:
Phased retirement must be at least 1 year but not more than 5 years.
The new work schedule cannot be 40% less than the full-time schedule
At the end of the phased retirement agreement, the employee will no longer be able to continue working in the public sector
To benefit from phased retirement, the employee must be full or part-time and have permanent employee status.
If you are interested in phased retirement, we strongly suggest that you talk about it with a specialized advisor. He will be able to do calculations and scenarios with you to find the most advantageous option.
Get a free retirement calculation report from RREGOP Advisors
Are you a Quebec government employee and would like to have a better idea of the money that will be paid to you at retirement by the RREGOP?
We have partner financial advisors who specialize in pension analysis and calculation for public sector employees participating in RREGOP.
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