The Canada Pension Plan has just gotten a makeover as the federal government has moved to make changes on it after almost 20 years . The changes will take affect by 2019.
So how does it look from here? By 2023, an extra $34 a month in pension premiums will mean up to $4,300 more in annual payouts come retirement time for the average Canadian wage earner.
The agreement-in-principle, which only Quebec and Manitoba didn’t endorse, will see an increase in monthly premiums phased in starting at $7 a month in 2019 for a typical worker earning about $55,000.
Once the plan is fully implemented, the maximum annual benefits will increase by about one-third to $17,478. Mandatory matching contributions will also mean a jump in payroll expenses for employers.
A change to the CPP needs the consent of Ottawa and a minimum of seven provinces representing at least two-thirds of the country’s population.
Provinces will have until July 15 to officially sign on to the agreement before it becomes formalized.
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