Changes to the Canada Pension Plan – an Overview

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Over the past few months I have attended various presentations concerning the changes being made to the Canada Pension Plan (CPP).

These changes have primarily come about to accommodate the changes in our country’s demographic makeup. People are living and working longer and as a result, exploring the potential of needing to save more money for life after work. As a result, the Canadian Pension Plan is changing.

The following is a brief outline of the 4 amendments being gradually implemented from 2011 to 2016:

  • Restore the adjustment factors to their actuarially fair levels for retirement pensions taken before and after age 65.
  • Allow CPP retirement pension recipients who work to make contributions to a new Post-Retirement Benefit.
  • Eliminate the requirement to stop working or decrease earnings in order to qualify for a reduced CPP retirement pension.
  • Enhance the general drop-out provision to exclude up to an additional year of low earnings from the benefit calculation.

Individuals who will be impacted by these changes include:

  • Employees who currently contributes to the CPP
  • Self-employed people who contributes to the CPP
  • Employees between the ages of 60-70 and receiving a CPP retirement pension

Employers who contribute to the CPP on behalf of their employees are also impacted.

Individuals who started to receive their CPP retirement pension prior to December 31, 2010 and remain out of the workforce will not be affected.

There are many factors that need to be considered and consequent calculations to be done for an individual when it comes to receiving the CPP retirement pension. In general, as a result of changes to CPP, a contributor who applies for the CPP retirement pension at age 70 would now receive approximately double the annual benefit they would have received had they applied at age 60.

For more information on these changes please visit