Earlier this summer, Ontario’s Wynne government scrapped plans to go it alone on pension reform, joining eight of 10 provinces in an agreement to expand the Canada Pension Plan (CPP). The changes, which mark the first significant increase to CPP benefits since the program’s creation in 1965, will take effect on Jan. 1, 2019. All employers in Canada with employees outside of Quebec will be affected.
The new CPP will see: benefits increased from one-quarter to one-third of pensionable earnings; employer and employee contributions raised by roughly $7 per month for workers earning $55,000; and the Year’s Maximum Pensionable Earnings (YMPE) – the limit on income subject to CPP contributions and accruals – jump 14 per cent by 2025, from $54,900 to $82,700. Changes will be phased in over a seven year period.
The decision means the planned Ontario Retirement Pension Plan previously proposed by the Wynne government will no longer be needed.
For a comprehensive look at the changes, visit gfl.me/h2YE.
