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CPP Enhancement Legislation Proclaimed

Another milestone has been reached in the implementation of improvements to the Canada Pension Plan (CPP). The federal legislation to bring the CPP enhancements into force has been proclaimed, as agreed in principle between the federal government and provinces in June of 2016. The CPP improvements will increase the maximum CPP benefit by about 50%; replace one-third of average annual earnings on retirement, up from one quarter; and increase the upper earnings limit at which this replacement rate maxes out to about $82,700. Starting in January 2019, the rate employers and employees pay into CPP will be gradually increased over seven years. The upper earnings limit will be increased over two years starting in 2024. An increase to the Working Income Tax Benefit will help protect low-income earners from the rate increase.

Courtesy of Benefits and Pensions Monitor website News Alerts 

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