Changes to Canada Pension Plan
The government of Canada has introduced changes to the Canada Pension Plan. Here is a schedule of changes:
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|---|
| Reduction in benefits if you start CPP before age 65 | -0.50% per month | -0.52% per month | -0.54% per month | -0.56% per month | -0.58% per month | -0.60% per month |
| Increase in benefits if you start CPP after age 65 | +0.57% per month | +0.64% per month | +0.70% per month | +0.70% per month | +0.70% per month | +0.70% per month |
| CPP contributions if you are under 65 and work while receiving CPP* | No | Yes | Yes | Yes | Yes | Yes |
| CPP contributions if you are age 65 to 70 and work while receiving CPP* | No | Optional | Optional | Optional | Optional | Optional |
| Drop-out provision for calculating CPP benefits | 15% of lowest earnings dropped | 16% of lowest earnings dropped | 16% of lowest earnings dropped | 17% of lowest earnings dropped | 17% of lowest earnings dropped | 17% of lowest earnings dropped |
| Work cessation test** | Yes | No | No | No | No | No |
*These contributions go towards the new Post-Retirement Benefit (PRB), which is effective January 1 of the year following your PRB contribution. This additional benefit will be added to your current retirement benefit, gradually increasing your retirement income – even if you are already receiving the maximum CPP pension amount. Note: If you are making CPP contributions, your employer will also have to make contributions.
**Under present rules, if you decide to take your CPP retirement pension before age 65, you have to either stop working or significantly reduce your earnings for at least two months.
