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February 2, 2010

Recent Changes to CPP

Certain changes were enacted to the Canada Pension Plan (CPP) on December 15, 2009.
In brief, the CPP was amended to:

(i) allow a person to take their retirement pension as early as age 60 without the requirement of a work interruption or earnings reduction, beginning in 2012
(ii) allow almost seven and a half years of low or zero earnings to be dropped from the contributory period because of the increase in the general drop out from 15% to 16% in 2012, and to 17% in 2014 (which would allow a maximum of eight years to be dropped),
(iii) require a contribution to the CPP from persons under the age of 65 who receive a retirement pension and continue working, thereby creating eligibility for a post-retirement benefit,
(iv) permit a person aged 65 to 70 who receives a retirement pension to elect not to contribute to the Canada Pension Plan, and
(v) have the adjustment factors that apply to early or late take-up of retirement pensions fixed by regulation after December 31, 2010 (Minister of Finance and ministers of the included provinces to review).

Additional information may be obtained from the Department of Finance website: http://www.fin.gc.ca/n08/09-051-eng.asp

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