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ur retirement income will consist of funds from i .Y number of sources, likely including the Canada Penâ€" sion Plan (CPP) â€" or the Quebec Pension Plan (QPP â€" and Old Age Security (OAS). You‘ve been hearing about these plans for years but you may not know a lot about how they actually work. So here‘s a CPP/OAS primer to help you out. CPPâ€" the facts CPP is a true pension plan. All paid workers, selfâ€" employed persons and employers in Canada are required to contribute to CPP and these contributions are invested in the CPP investment fund. TR Any province can opt out of the CPP as long as it agrees to establish a comparable program. Quebec is the only province that‘s chosen to do so with its own QPP. Employee CPP contributions are eligible for a nonâ€"refundable tax credit. Employer contributions are a deductible expense for the employer. For selfâ€"employed perâ€" sons, half of the contributions qualify for the tax credit and half is a deductible expense. CPP retirement benefits are based on your average earnings and the number of years you have contributed to CPP. CPP benefits are increased once a year based on annual increases in the Consumer Price Index (CPT). CPP benefits normally begin at age 65 but you can elect to take early retirement and start receiving reduced CPP benefits at age 60 or postpone benefits until age 70. â€" CPP also provides a monthly benefit to participants who have become disabled and cannot work, a lump sum payâ€" ment on the death of the CPP participant and a monthly benefit paid to the surviving spouse and/or to dependent children. Benefits of CPP: * It is taxable income to the recipient * It is not incomeâ€"tested. * It can be shared for incomeâ€"splittin both spouses are receiving CPP. * It is subject to creditâ€"splitting upon down OAS is not a pension plan. It is a federal program entirely funded from general taxation revenue. OAS retirement benefits are available if you are 65 years of age and have been a resident of Canada for at least 10 _ â€" years after age 18. The OAS program also provides a Guaranteed Income Supplement (GIS) for lowâ€"income seniors, a spouse‘s allowance paid to a person who is at least 60 years old and whose spouse is receiving OAS and GIS, and a survivor‘s allowance paid to the surviving spouses (who are at least age 60) of persons who were receiving OAS and GIS. All OASâ€"related benefits are incomeâ€"tested â€" with clawâ€" backs beginning at an income level of $64,718 for 2008. Benefits of OAS: * It is taxable (GIS and the spousal allowance are not)}. * It cannot be shared for incomeâ€"splitting purposes when received by one or more spouse. Be sure you‘re wellâ€"informed about all your retirement income options â€" talk to your professional advisor today. This column, written and published by Investors Group Financial Services Inc., presents general information only and is not a solicitation to buy or sell any investments. Contact Russ McEachnie at 519â€"886â€"2360, ext. 241 or email him at AS,.)__ russell mceachnie @inuestprsgroup.com. CPP and OAS are cousins, not twins * It is not subject to creditâ€"splitting upon marriage break splitting upon marriage break splitting purposes once a SQUTH on FRAMRELIN SLYD. EAST ON CLYDE FOR 2 Ks + COURSE S ON THE LEFT s es is 2 j Mautes S Or nE 48 7 WATERLOO CHRONICLE + Wednesday, May 7, 2008 * 21 off Canâ€"Amera Parkway just east of Hespeler Rd. 155 Canâ€"Amera Parkowaty,