These changes 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 are 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.
What are the changes?
- The following changes are being 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.
- 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 has increased (2012 and 2014).
- You are now able to start receiving your CPP retirement pension without any work stoppage.
- Now if you are under age 65 and you work while receiving your CPP retirement pension, you and your employer must make CPP contributions (or if you work outside of Quebec while receiving a QPP retirement). These contributions will increase your CPP retirement benefits starting the following year.
- Now 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), these contributions will increase your CPP retirement benefits beginning in the following year.
These changes were designed to improve retirement flexibility for working individuals in Canada, enhance pension coverage, and improve equity in the CPP.