Policy Implementation Brief: The Pension-Back Death Benefit

The National Institute on Ageing recommends adding a “pension-back death benefit” (PBDB) to the Canada and Québec Pension Plans (CPP/QPP) to strengthen retirement income security for Canada’s older adult population.

How does it work? The CPP retirement benefit can be claimed anytime between ages 60 and 70 (or up to 72 under the QPP), with significant increases for every month of delay. The PBDB would reimburse, in the case of early death, the difference between the benefits actually received and what would have been received had benefits been claimed at age 60. This reform directly addresses the widespread fear of “losing money” by delaying benefits—a fear that leads many Canadians to claim too early, undermining their long-term financial security despite the clear advantages of waiting.

No extra cost to Canadians. The PBDB requires no taxpayer dollars and no additional CPP/QPP contributions. It would be fully self-financed within the existing adjustment structure, with no impact on the basic age-65 pension entitlement.

In fact, since it is designed to put more retirement income into the pockets of older Canadians, the PBDB has the potential to reduce the burden on public income-tested social programs, such as Old Age Security (OAS).

The PBDB is a high-impact, time-sensitive reform. It directly addresses fairness concerns, nudges Canadians toward better retirement outcomes, and strengthens public trust in CPP/QPP—while safeguarding the sustainability of Canada’s retirement income system.