Canada Pension Plan (CPP) changes effective January 1, 2012; How will you be affected?

For more details

Letter to Minister Flaherty

Of further interest:

Under the current Canada Pension Plan (CPP) rules, employer/employees are not required to pay CPP contributions while continuing to work and collect their benefits. However, effective January 1^st, 2012 the new rules apply if you are under the age of 65 and are working while collecting your CPP benefits, you will be required to make CPP contributions again. For those between the ages of 65 and 70, contribution by the employee becomes voluntary; however, should an employee opt to contribute to CPP, their employer will also have to make CPP contributions.

Important information for employers:

• Contributors will be able to receive their CPP retirement pension without any work interruption.
• If your employee is under 65 and works while receiving a CPP retirement pension, you and your employee will have to continue making CPP contributions.
• If your employee is at least 65 but under 70 and works while receiving a CPP retirement pension, he or she can either choose to make CPP contributions or elect not to contribute (you will have to contribute if he or she does).
• CPP contribution rate.

If you start to contribute to CPP again, while receiving your benefits, where do contributions go?

• Canada Pension Plan Post-Retirement Benefit

We have heard from our members who are going to be affected by these changes, and have raised your concerns in a letter to Finance Minister Flaherty. We have asked the government to consider making employer contributions voluntary when they have an employee over the age of 60 that is drawing CPP benefits. As the employee is the beneficiary of the benefit, and there is absolutely no benefit to the employer in paying into CPP. Also for those who are self-employed, they should not be required to contribute to CPP once they have begun to draw their CPP benefits, we have asked to leave it as simply an option for the self-employed to consider, much like other government assistant programs for this group.

Of further interest: Factsheet: Changes to Canada Pension Plan