Hi, my name is Selena, and I'm a Service Canada employee.
Are you retired or thinking about retiring?
If so, you'll want to know about the changes coming
to the Canada Pension Plan starting on January 1, 2011.
You know, we Canadians are living longer,
healthier lives, and this is really changing
how we make the transition from work to retirement.
So the Canada Pension Plan, more commonly known
as the CPP, is adapting to the ways we choose to live,
work, and retire.
Soon you'll have more options to make the decisions
that are right for you.
Changes will gradually be introduced from 2011 to 2016.
If you started receiving a CPP pension
before December 31, 2010, and you stay out of the work force,
you won't be affected.
So what are the changes for employees
and self-employed people who contribute to the CPP?
Well, starting in 2011, if you decide to receive
your CPP retirement pension after 65, the amount
you receive will increase by a larger percentage.
For example, as of 2013, if you start receiving
your CPP pension at 70, your benefit amount
will be 42% more than if you take it at 65.
That's up from 30% before the changes.
On the other hand, beginning in 2012,
if you choose to receive your pension before 65,
the amount will decrease by a larger percentage.
This means that by 2016, if you start receiving
your CPP pension at 60, your benefit amount
will be 36% less than if you take it at 65.
Before the changes, it was 30%.
Starting in 2012, the number of years of low
or zero earnings automatically eliminated
from the calculation of your CPP pension will increase,
which will likely increase your pension benefits.
Also, you will be able to take your CPP retirement
pension without any work interruption,
making it much easier for you to phase into retirement.
The last change affects people between the ages
of 60 and 70 who work while receiving
a CPP retirement pension.
Starting in 2012, if you are under 65 and work
while receiving your CPP retirement pension,
you and your employer will have to make CPP contributions.
But, between the ages of 65 and 70,
you can either choose to make contributions, or opt out.
If you choose to make contributions,
your employer will still have to contribute.
These contributions will ultimately increase
your retirement income through the new Post-Retirement Benefit.
Now, all these changes to the CPP may affect your
retirement planning, including when you decide to apply for
your CPP retirement pension.
For more information, check out all our online resources.
They'll help you effectively plan your retirement future.
At Service Canada, we're people serving people.