Featured Posts

Did you know that Canada will implement a new System of Retirement or Pension Program?


Probably during the last time you witnessed through the media the arduous debate between the: Federal, Provincial and Territorial Government on the expansion of the Canada Pension Plan.

In this regard, on Monday June 20, 2016, the Federal Minister of Finance: "Bill Morneau" during his conference in Vancouver - British Columbia finally addressed the issue.

Morneau started the press conference by referring to the main factors that led to the expansion of the CPP = Canada Pension Program. Affirming that for decades after World War II, workers in large companies had guaranteed to get a decent pension, through receiving a monthly check for a specific and certain amount of money provided by the same company at the which they had remained linked during their working lives.

Unfortunately today, these pension plans have disappeared gradually, in particular can be seen that have been deleted in their entirety by large and prestigious companies such as vehicle manufacturing, steel and even insignes oil companies.


To better understand this scenario, the Minister proposed to go back to 1971, specifying that at that time about 48 percent of men had pension coverage according to Statistics Canada, in the same way by comparing that figure with present, proportion of men who have a retirement plan is reduced to only 25 percent.

Following these alarming figures have been repeated in the last decade is that the government has decided to implement an action plan, which is designed to protect and benefit the middle class, mainly workers under 45 years age which your income fluctuates between 50 and 80 thousand dollars a year average.

According to economists this new action plan will be very beneficial to the aforementioned social sector, because otherwise, they warn that these citizens would have to face old age with funds from personal savings only.

Notably, experts have warned about this situation for years, specifically about pensions for the middle class, just as the CPP has been on the government agenda since 2009. Yet unfortunately not agreement had been reached as to obtain the absolute approval of changes were required approval from Ottawa and also at least 7 provinces, which involves at least two thirds of the country's population.

While the date limit determined for the completion of the project had been determined for 2018, the Liberal government believe that the solution of the new CPP agreement was a priority issue, that why they just announced that the new measures will be effective from 2019.

Regarding changes and its main amendments, we would stress that currently workers and employees in Canada pay 4.95 percent of their salaries to the CPP, with an annual cap of 54,900.



Today, when people retire at the age of 65 years receive a pension of about $ 13,110 per year under the current program, now people earning more than $ 54,900 a year do not contribute to CPP on that level, and they not increase their personal retirement benefits long term.

With the new system an increase in the annual pension payment will apply an estimated rise between 25 or 33 percent.

That means that workers who earn $ 54,900 a year will receive a maximum annual pension of $ 17,500 projected by 2016, this implies an increase of

$ 4,390 according to estimates by the Federal Department of Finance.

The second major change we would like to mention relates to the revenue involved by the CPP, as passed from $ 54.900 to $ 82.700 when the program is in action in 2025.

Which means that those with higher incomes are also eligible for membership in the CPP program.

When does this increase will be effective and what are the changes?


CPP contributors, workers and employers companies increase one percentage point, passing from 4.95 to 5.95 percent during the years 2019 to 2025 in order to impact budgets slowly and subtly.

For example people who have incomes of $ 54,900 a year will see their monthly premiums from $ 9 to a maximum of $ 43 when the project is fully implemented.

Who will benefit?

The main beneficiaries will be young employees who are currently part of the most vulnerable segment of society, as are those who probably would not have access to retirement if the system can not be amended with the agreement just reached.

It should be noted that to access these new benefits a person needs to contribute for 40 years with new levels or percentages established by the new law.

Which will be in full effect during 2025. This means that the current population of 10 years old will be the first generation to benefit from the new system.



While the agreement does not imply benefits or changes to other social segments age, compared to the proposals made are the best option in terms of implementation costs, because due to the pre-existence of the CPP, changes require a minimum of infrastructure, involving a much lower cost than it would have cost the introduction of a new system or government pension program.

To summarize the social reception of the CPP agreement was assessed positively as it represents the rapid fulfillment of another of the electoral promises of the current Liberal government led by Justin Trudeau.


                                       makesomenoisecanada@gmail.com