On June 20th, Bill Morneau, Minister of Finance, released a statement at the conclusion of the day’s meeting of federal, provincial and territorial Finance Ministers, where an agreement in principle was reached that will strengthen the Canada Pension Plan (CPP).
This CPP enhancement is slated to start January 1, 2019, and will:
- increase income replacement from one quarter to one third of pensionable earnings—this means that, at maturity, a Canadian with $50,000 in constant earnings throughout their working life would receive a yearly pension benefit of around $16,000 instead of the $12,000 they would currently receive, or $4,000 more per year; and
- increase the maximum amount of income subject to CPP by 14%, which is projected to be equal to roughly $82,700 in 2025.
To read the entire release, click here.
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