• Last Updated:
  • Sep 28th, 2016 8:31 pm
Tags:
None
[OP]
Deal Addict
Dec 11, 2010
1700 posts
137 upvotes

CPP Expanded!

This is great news. While everyone's pay cheques will be getting smaller, we can also all spend a greater percentage of income now, as we now won't have to save as much for retirement. I did some calculations, and between CPP and OAS, assuming my house is paid off, I'll be set!

http://www.theglobeandmail.com/news/pol ... e30532203/
434 replies
Deal Addict
Sep 7, 2004
1595 posts
591 upvotes
Toronto
Im really not sure how I feel about this. As it is I don't factor in any potential CPP revenues into my retirement plan. The fact that they are now going to be pulling more money out of my paycheck to fund something I may or may not be able to benefit from in the future is rather annoying.

From your perspective (OP) we can spend more of what's leftover but honestly I do save, I have RRSP's that I contribute to regularly, I have a TFSA that I contribute to regularly, I have a company Pension (DC) that I've been paying into since I started working, beyond that I have my own cash savings, and stocks and other investments. I think I'm adequately prepared/preparing for my retirement and for the government to tell me that I'm not and that they want to increase the amounts I have to pay into this scheme for something that I may never draw from just doesn't sit well with me.

I look forward to the point in the year where I reach my YMPE and now it's going to be pushed way back. Why can't the government just leave us to fend for ourselves??? I'd be totally ok with it if they made the new contributions opt-in but forcing me to contribute?? ugh.
Deal Addict
May 15, 2013
1771 posts
478 upvotes
Montreal
It says that Quebec and Manitoba didn't sign it ... wondering if all provinces have to sign it to be applied....
Sr. Member
May 3, 2011
671 posts
90 upvotes
gqbluez wrote: Im really not sure how I feel about this. As it is I don't factor in any potential CPP revenues into my retirement plan. The fact that they are now going to be pulling more money out of my paycheck to fund something I may or may not be able to benefit from in the future is rather annoying.

From your perspective (OP) we can spend more of what's leftover but honestly I do save, I have RRSP's that I contribute to regularly, I have a TFSA that I contribute to regularly, I have a company Pension (DC) that I've been paying into since I started working, beyond that I have my own cash savings, and stocks and other investments. I think I'm adequately prepared/preparing for my retirement and for the government to tell me that I'm not and that they want to increase the amounts I have to pay into this scheme for something that I may never draw from just doesn't sit well with me.

I look forward to the point in the year where I reach my YMPE and now it's going to be pushed way back. Why can't the government just leave us to fend for ourselves??? I'd be totally ok with it if they made the new contributions opt-in but forcing me to contribute?? ugh.
You may be better off in America with that mindset.
Deal Fanatic
User avatar
Apr 16, 2006
6134 posts
581 upvotes
iamthebest wrote: It says that Quebec and Manitoba didn't sign it ... wondering if all provinces have to sign it to be applied....
I don't believe so. It's a federal program...the feds were probably not going to meddle with it unless it had the support of the majority of the provinces, which 8/10 is.

Silly Quebec. They can't agree with the rest of Canada for anything.
Sr. Member
User avatar
Feb 28, 2010
540 posts
163 upvotes
Octavius wrote: I don't believe so. It's a federal program...the feds were probably not going to meddle with it unless it had the support of the majority of the provinces, which 8/10 is.

Silly Quebec. They can't agree with the rest of Canada for anything.
A change to the CPP needs the consent of Ottawa and a minimum of seven provinces representing at least two-thirds of the country’s population.

Quebec has its own QPP, so the impact of its not agreeing to CPP changes is unclear. I don't know if there are any automatic legalities that affect QPP if CPP changes. On the other hand, QPP and CPP are broadly similar, and there would be pressure to keep it that way.
GQBLUEZ wrote:As it is I don't factor in any potential CPP revenues into my retirement plan. The fact that they are now going to be pulling more money out of my paycheck to fund something I may or may not be able to benefit from in the future is rather annoying
This seems unduly pessimistic. CPP is a well defined pension plan, and the likelihood that it won't provide benefits is probably far less than, say, a corporate pension plan.
Deal Fanatic
User avatar
Sep 1, 2013
6039 posts
752 upvotes
insurance1 wrote: This is great news. While everyone's pay cheques will be getting smaller, we can also all spend a greater percentage of income now, as we now won't have to save as much for retirement. I did some calculations, and between CPP and OAS, assuming my house is paid off, I'll be set!
Not so great news for employers, who will also be footing 1/2 the amount of the increased premiums. Also not so great news for people they would have hired if not for the fact that an expanded CPP increases labour costs.
Member
Nov 19, 2011
292 posts
66 upvotes
Calgary
Honestly I'm ganna miss what was a larger pay check after I contributed to max :,(. Personally I believe that everyone is responsible for there own retirement, I have no plans to really on the government since for all I now by the time I'm ready to retire we have an aging population and the young people at the time can't afford to support the old peoples. Only good thing I think cpp has is that it force employers to invest in employee's retirement. I understand that not everyone is ganna be able to save for retirement, but generally I would believe that these are the same people who could benefit from a slightly larger pay check at the end of the day.
Deal Guru
Mar 20, 2003
10370 posts
590 upvotes
New-Brunswick
I think this is great and their main reason for it was a sound one- people just don't save. Too many I talk to haven't started saving in their mid-30s so this will provide them with a bit more income at retirement. I didn't read much on it but from what I understood, aren't we only going to start with 7$ more a month, and only in 2019? That gives people more than enough time to adjust and budget for it. Though in the subsequent years it may start adding up and get difficult, especially for the min. wage earners.
Sr. Member
Mar 18, 2012
576 posts
119 upvotes
I'm not sure how I feel about this either. I don't need it for our plan I just like having control over it myself I guess.
However having spoken to Co-workers and friends I see that it certainly is needed as people spend no time on planing of preparing for retirement. It's frightening how they don't know how any of CPP and OAS work or even how their own DP and DC plans from work work. I have guys still telling me they'll retire when they hit 30 years even though under out DC plan now it doesn't matter at all.
So basically those of us who plan are inconvenienced for those that don't. However I'm too much of a bleeding heart to want old people not taken care of. So we may as well increase our CPP as otherwise government funds would be used to support those who didn't plan.
Deal Fanatic
Nov 24, 2013
6214 posts
2963 upvotes
Kingston, ON
For us in Ontario, the silver lining is this kills ORPP. Phase-in will be more gradual and we won't be paying for a new bureaucracy.

Definitely a win for all of us at least.
Deal Expert
Aug 22, 2011
35599 posts
21667 upvotes
Center of Universe
Does not apply to organizations that have similar plan in place, such as DCPP.
Banned
User avatar
Jun 8, 2008
3977 posts
1414 upvotes
Toronto
vkizzle wrote: Does not apply to organizations that have similar plan in place, such as DCPP.
I'm pretty sure that was true of the Ontario Pension Plan scheme that will be killed now. The revised CPP will affect everyone.
Deal Expert
User avatar
Jun 9, 2003
24795 posts
1907 upvotes
Markham, ON
Mike15 wrote: For us in Ontario, the silver lining is this kills ORPP. Phase-in will be more gradual and we won't be paying for a new bureaucracy.

Definitely a win for all of us at least.
lol wasnt ORPP suppose to add 12K a year if you made maximum contributions (6K if average contributions)...this CPP expanded is only going to add 4K...
Deal Expert
User avatar
Dec 7, 2012
32228 posts
8560 upvotes
GTHA
Wage, hours, job losses loom as governments move forward with CPP hike
TORONTO, June 20, 2016 /CNW/ - Canada's finance ministers decided to hit small business owners with another tax today, with an agreement in principle to expand the Canada Pension Plan (CPP), a devastating move for Canadian workers and the economy in general.

"It is tremendously disappointing to see that finance ministers are putting Canadian wages, hours and jobs in jeopardy and willfully moving to make an already shaky economy even worse," said CFIB president Dan Kelly. "Despite all the talk, it appears that jobs and the economy are not particularly high priorities for the governments that have signed off on this deal."

Reports suggest Manitoba and Quebec have not agreed with the plan.

The agreement in principle will see a CPP hike phased in between 2019 and 2025. Contributions will increase to cover 33 per cent of income, up from 25 per cent under the current system. The earnings threshold will increase to $82,700 by 2025.

No consultations?

"What's worse, it appears governments aren't even bothering to consult Canadians on the move – even when an Angus Reid poll shows that less than 10 per cent are following the issue," added Kelly.

Lone positive: Ontario Retirement Pension Plan is dead

"The only positive to come out of this process is that the ORPP – the CPP's far uglier cousin – won't come to fruition," said Kelly. "It's a shame that Ontario spent millions of dollars to effectively bully the smaller provinces to force their pension agenda."

Impact on small businesses
  • 71 per cent of small business owners oppose a mandatory premium hike, according to CFIB's latest survey
  • 67 say it would increase pressure to freeze or cut salaries
  • 46 per cent say they would reduce investment in their business
  • 35 per cent say it would force them to lay off employees
CFIB is Canada's largest association of small- and medium-sized businesses with 109,000 members across every sector and region.

SOURCE Canadian Federation of Independent Business
Sr. Member
Feb 21, 2010
878 posts
252 upvotes
Scarborough
Earlier the maximum annual CPP payments were 13110 (1092.5 * 12) and we paid 9.9% (employee 4.95% and employer 4.95%) of $51400 (54900 - 3500).

Now once CPP expansion is all phased in, the Annual Maximum Contributions Earning will be raised to 82,700 and we should be paying 5.95% for employee and 5.95% for employer to get 33% of 82,700 which is about $27291 per year. But in news it tells that 13110 has been increased by one third to 17436/ year. What am I calculating wrong here?
Sr. Member
User avatar
Feb 28, 2010
540 posts
163 upvotes
romeocanada wrote: Earlier the maximum annual CPP payments were 13110 (1092.5 * 12) and we paid 9.9% (employee 4.95% and employer 4.95%) of $51400 (54900 - 3500).

Now once CPP expansion is all phased in, the Annual Maximum Contributions Earning will be raised to 82,700 and we should be paying 5.95% for employee and 5.95% for employer to get 33% of 82,700 which is about $27291 per year. But in news it tells that 13110 has been increased by one third to 17436/ year. What am I calculating wrong here?
I think that $82,700 YMPE is in 2025 dollars, not 2016. They seem to have anticipated the normal YMPE increases, as well as the new 14% YMPE increase which will phase in during 2024-25. Try using something like $62,600 (~ 54900*1.14) instead of 54900 and see how it works out. It is very irritating that their briefing stuff seems to use 2016 dollars for things like benefits but future dollars for the YMPE.
Deal Expert
Aug 22, 2011
35599 posts
21667 upvotes
Center of Universe
wirebound wrote: I'm pretty sure that was true of the Ontario Pension Plan scheme that will be killed now. The revised CPP will affect everyone.
"The ORPP proposed a system in which employers would have been exempt from participating if they already provided their employees with a pension plan that met specific criteria."
Deal Expert
User avatar
Jun 9, 2003
24795 posts
1907 upvotes
Markham, ON
Mike15 wrote: For us in Ontario, the silver lining is this kills ORPP. Phase-in will be more gradual and we won't be paying for a new bureaucracy.

Definitely a win for all of us at least.
definitely businesses that have a pension plan are losers...now there is another "tax" that why will need to fork out without much benefit to the business (this is really surprise to many). So if you're a shareholder...you're a loser.

small businesses were already planning for this either with the expanded cpp or orpp.
Deal Addict
User avatar
Aug 10, 2015
1762 posts
605 upvotes
Elgin, ON
I like the long / gradual phase in. Changing too much, too fast, can create some dangerous waves.

Top