Canada Pension Plan (CPP) Changes January 2011

These changes will affect you if you are:

• an employee who contributes to the Canada Pension Plan (CPP), whether you are just starting your career or you are planning to retire soon;

• a self-employed person who contributes to the CPP;

• between the ages of 60 and 70 and you work while receiving your CPP retirement pension (or if you work outside of Quebec while receiving a Quebec Pension Plan (QPP) retirement pension); or

• an employer who contributes to the CPP on behalf of your employees.

• You will not be affected by these changes if you started receiving a CPP retirement pension before December 31, 2010, and you remain out of the work force.

The CPP operates throughout Canada, except in Quebec, where the Quebec Pension Plan (QPP) provides benefits. These changes do not apply to QPP.

The following changes will be phased in gradually between 2011 and 2016. The first major change occurred in January 2011 for people retiring after age 65:

• Your monthly CPP retirement pension amount will increase by a larger percentage if you take it after age 65 (gradually from 2011 to 2013).

• Your monthly CPP retirement pension amount will decrease by a larger percentage if you take it before age 65 (gradually from 2012 to 2016).

• The number of years of low or zero earnings that are automatically dropped from the CPP retirement pension calculation will increase (2012 and 2014).

• You will be able to start receiving your CPP retirement pension without any work stoppage (starting in 2012).

• If you are under age 65 and you work while receiving your CPP retirement pension, you and your employer will have to make CPP contributions (or if you work outside of Quebec while receiving a QPP retirement) (starting in 2012). These contributions will increase your CPP retirement benefits (starting in 2013).

• If you are age 65 to 70 and you work while receiving your CPP retirement pension, you can choose to make CPP contributions (or if you work outside of Quebec while receiving a QPP retirement pension) (starting in 2013).

These changes were designed to improve retirement flexibility for working individuals in Canada, enhance pension coverage, and improve equity in the CPP.