Increase Canada Pension Plan contributions?

[NAB]

This item will apparently be high on the agenda when the Provincial Finance Ministers meet in Ottawa this week.

Nab

...some background at
http://www.thestar.com/news/queenspark/ ... tions.html

snips>

...ministers, laying the groundwork for a provincial premiers’ meeting in mid-November aimed at presenting a skeptical federal government with a common front, envision a sliding scale for contribution rates.

...Any changes to CPP require the agreement of Ottawa and at least seven provinces that combined have two-thirds or more of the country’s population

...CPP now gives retirees a maximum of $12,000 annually at a time when about 60 per cent of workers do not have company pension plans, many of which are scaling back benefits as the country awaits what Sousa dubbed a “tsunami of retirees” from the baby boom.

...High-income earners would pay more to enhance Canada Pension Plan payouts than lower-paid workers under a plan hatched by provincial treasurers Friday, Ontario Finance Minister Charles Sousa says.

....As the federally run plan now stands, workers kick 4.95 per cent of their pay into CPP, subject to a yearly maximum. The amount is matched by their employers.

...Prince Edward Island has proposed doubling contributions and almost doubling payouts while other provinces, such as Alberta, Quebec and Saskatchewan, have been more resistant to CPP enhancements.

....(Ontario Finance Minister) Sousa, whose government has said it will consider starting an Ontario pension scheme if the federal government doesn’t enhance the CPP, would not reveal any figures on how contribution rates would change

.....Federal Finance Minister Jim Flaherty has said he is worried that requiring higher contributions from employers and employees could jeopardize job creation as the economy struggles to improve.

....Business groups have also raised concerns, with the Canadian Federation of Independent Business warning that bigger pay-ins would force their members to freeze or cut salaries and eliminate jobs in some cases

[Donald G]

If you want more money out you have to put more money in ..

[GrooveTunes]

..CPP now gives retirees a maximum of $12,000 annually at a time when about 60 per cent of workers do not have company pension plans, many of which are scaling back benefits as the country awaits what Sousa dubbed a “tsunami of retirees” from the baby boom.

And the cpp portion that I will receive is deducted from my company pension plan at 65.

[Donald G]

To Groove Tunes ...

Do you mean "taxed at the going percentage" or actually the entire amount of your CPP "deducted from" the amount you receive from your company pension plan? That does not seem right. What about when you reach 65 and your old age pension plan also kicks in? And your Pension Income Supplement?

[NAB]

Lets try to keep the topic discussion specifically to CPP contributions please Donald, and not clutter it and take it off topic with unrelated things like OAP and GIS.

Nab

[Donald G]

To NAB ...

You are saying that this string is not for those who want to understand where CPP contributions and subsequent payout of CPP fit into the various Canada Pension and private pension contributions and entitlements?

When a person says that they pay into CPP but are not entitled to CPP benefits (deducted from company pension plan) I consider that very applicable to any existing or increase in CPP contributions.

[GrooveTunes]

To Groove Tunes ...

Do you mean "taxed at the going percentage" or actually the entire amount of your CPP "deducted from" the amount you receive from your company pension plan? That does not seem right. What about when you reach 65 and your old age pension plan also kicks in? And your Pension Income Supplement?

I want to answer this NAB but i'll only do it once. There's a ton of mis information about our so called gold plated pensions.

35+ years service gets me roughly $1500 a month pension. A bridge of roughly $1000 a month is also what I get but that stops once I start collecting cpp at 65.

[NAB]

I'm not sure what GrooveTunes meant by that either Donald, so if and until he/she explains there's little sense speculating. Regardless, the question has to do with the specific proposal to increase the contributions employees and employers make to the Canada Pension Plan.

Nab

[Donald G]

To Grove Tunes ...

So it is not any of your $1,500.00 per month company pension that is being deducted. It is the $1,000.00 company supplement you received up until you were entitled to the $1,200.00 per month in CPP that was deducted until you were 65. At which age you also became entitled to the Old Age Security Pension and Income Supplement Pension.

That is the same for Federal Government workers who have additional pension plans as well. I paid into three Government Pension Plans ... which one could argue "Increases" Pension Plan Contributions.

I'm completely back "on topic" NAB now that I more clearly understand what Grove Tunes was talking about ... and omitting from his/her initial comments.

[rvrepairnut]

To Groove Tunes ...

Do you mean "taxed at the going percentage" or actually the entire amount of your CPP "deducted from" the amount you receive from your company pension plan? That does not seem right. What about when you reach 65 and your old age pension plan also kicks in? And your Pension Income Supplement?

My DW worked for the BC gov for 30 years.Her pension plan she opted to receive was that at age 65 her pension from the BC government was reduced by the amount of CPP and OAS payments she received at age 65.The CPP she took at age 60 through 65 was not effected.I took that money each month and invested it and converted it to a RIF.Her combined pension is now more than her original one from 11 years ago

[rvrepairnut]

To Grove Tunes ...

So it is not any of your $1,500.00 per month company pension that is being deducted. It is the $1,000.00 company supplement you received up until you were entitled to the $1,200.00 per month in CPP that was deducted until you were 65. At which age you also became entitled to the Old Age Security Pension and Income Supplement Pension.

That is the same for Federal Government workers who have additional pension plans as well. I paid into three Government Pension Plans ... which one could argue "Increases" Pension Plan Contributions.

I'm completely back "on topic" NAB now that I more clearly understand what Grove Tunes was talking about ... and omitting from his/her initial comments.

you do not ever get $1,200.00 per month in CPP I think the max is around 900 ish

[Donald G]

To rvrepairnut ...

You are right.

[NAB]

...and that's taxable income to boot unlike OAS. And of course, at such retirement income levels "pension income supplement" to OAS (GIS?) has no bearing at all. The question still remains, should Canada Pension Plan contributions be increased, in the case of one analysis and related proposal this week as much as doubled! 60% of workers have no private contributory retirement plans and will be totally dependent on their accumulated CPP contributions to generate even a marginally livable retirement income.

Nab

[Captain Awesome]

I wish people had a choice to scale down their CPP contribution in favor of larger paycheck so they can invest it themselves - instead of giving the government more and more money hoping to get it back some time down the road.

[Bsuds]

I wish people had a choice to scale down their CPP contribution in favor of larger paycheck so they can invest it themselves - instead of giving the government more and more money hoping to get it back some time down the road.

Except most won't do it!