The Changes To The Canada Pension Plan for 2012

Just read this great article at the Winnipeg Free Press by David Christianson. 2012 ushers in a series of changes to the Canada Pensions Plan for employers. These changes will affect individuals between the ages of 60 and 70 who work while receiving CPP retirement pensions. You can view a quick link here from Service Canada that outlines the details:

http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/ISPB-348-11-10_E.pdf

  • Your monthly CPP pension amount will increase by a larger percentage if you take it after age 65.
  • Your monthly CPP pension amount will decrease by a larger percentage if you take it before age 65.
  • Employees under 65 receiving CPP pensions will now be required to make CPP contributions. These contributions will increase CPP retirement benefits.
  • Employees age 65 to 70 receiving CPP pensions can now elect to make CPP contributions. These contributions will increase their CPP retirement benefits.

In a nutshell, there will be some corporate bookkeeping changes that will be required with CPP contributions as monthly remittance. As the employer, it’s your responsibility to be aware of the age of your employees in order to comply with these changes. Employers must withhold and remit all CPP deductions on pensionable earnings for any employees between the ages of 60 to 65 and they must also withhold CPP deductions on pensionable earnings for all employees between the ages 65 to 70 unless they have chosen to stop contributing to the CPP. In line with these changes, you’ll also have to check if the employee has previously filed to stop contributing to the CPP with a previous employer.  If they have, you’ll have to request a copy of the filing for your records.

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