Proposed Changes to Canada Pension Plan

Currently, CPP at age 65 is $934 per month.   Starting in 2011, CPP will begin phasing in higher payments to those of us who wait beyond age 65 to start our pensions, and lower payments for those of us who decide to collect them earlier.

Under the proposals, deferring our pension will add $78 each year, up to $1326 per month by age 70.  On the other hand, if we start to collect early, we will lose $67 each year, and receive only $598 at age 60.  (Our actual pension will depend on our contribution history, and annual inflation adjustments.)

Also, starting in 2012 we no longer have to stop work or reduce our earnings for at least two months in order to apply for CPP.  If we collect early and continue working, both we and our employer will still be required to contribute to CPP.  (This means a higher pension the following year.) At  age 65, contributing to CPP will then be optional.