There are four main changes to CPP effective January 1 2012:
- The requirement to stop working or reduce earnings in order to apply for early benefits is removed.
- CPP recipients who continue to work will continue to make premium contributions (as well as their employers) to age 70.
- The rate of adjustment for early and late pension application increases.
- The low earnings years ‘drop-out’ provision is increased.
These changes do not affect those already receiving CPP retirement benefits UNLESS they will not be 65 before 2012 AND are still earning pensionable earnings. These individuals will have to start contributing again in 2012.
For those who are between the ages of 65 – 70, they can elect to stop making further contributions to CPP by filing form CPT30. For those who are self-employed, this election is made on their tax return.
These changes are significant, time sensitive and should be reviewed with your financial planner.