5 Things To Know About Canada Pension Plan Changes
If you’re looking to retire, then you’ll want to know about the changes to the Canada Pension Plan (CPP) and how they will affect your retirement income. Federal Finance Minister Bill Morneau announced a suite of changes after meeting with his provincial counterparts in December 2017. Here are five things Canadians should know regarding the changes.
- Time off work for children or disabilities will not reduce retirement benefits for Canadians.
- Instead of “drop out” years, benefits will be calculated with a 40-year accrual that will set the income for non-working years.
- Survivors benefits will be paid regardless of age, dependent children or disability, and a lump-sum death benefit of $2,500 instead of being calculated based on a deceased’s earnings.
- A lump-sum payment upon a person’s death will be set for everyone at $2,500, instead of being calculated based on a deceased’s earnings.
- The government says there won’t be an increases in CPP contribution rates, but Canadians will have to wait until the chief actuary assesses the costs and effects of all the measures once the Liberals table the necessary legislative amendments to the CPP.
“The government says the changes won’t require increases in CPP contribution rates.”
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