Proposed Changes to the Canada Pension Plan

On May 25, 2009 Finance Canada announced some proposed changes to how Canada Pension Plan will work.

If approved, the changes will take effect over a period of time from
2011 to 2016, so they will affect anyone planning to retire after 2010.

Below is a brief summary of some of the most important changes:

Early retirement (before age 65) will result in a reduction in CPP benefits by 7.2% per year, which is up from the traditional 6%. This means that if you
begin to take your pension at age 60, your payments will be cut by 36%, not 30%.

On the flip side of this, late retirement (after age 65 but before age 71), CPP benefits will be increased, not by 7.2% but by 8.4%, which is up from the
traditional 6%. this means that if you wait until age 70 to take your CPP, the benefit payments will be 42% higher, compared to the 30% higher today.

If you want to begin to collect CPP while you are still working (which may happen in a recession such as this because people are having to get new employment that does not pay as much as the last job did so they need to supplement their income), then instead of having to stay out of work for 2 months like you do now, you can begin to collect CPP at age 60 even if you continue to work - AND after age 65 if you are collecting CPP but want to continue to work, the proposal is that you can contribute to CPP again through your work in order to increase your benefits.

The calculation for CPP will change as well - currently the lowest 7 years of earnings is deleted from the calculation - under the proposals, the lowest 8
years will be omitted so that the benefits are not weighed down by low earning years.

For further details about these proposed changes, you can visit the Department of Finance website directly (click here) for more information.


Questions about retirement planning?
Contact our office

What our clients are saying...

  • I appreciated feeling valued as a client. It was a pleasure to have uninterrupted meetings. The reports were very detailed and tailored to me and all the explanations were very clear. It was refreshing not to feel pressured into anything as I have felt in the past. My expectations are to have regular updates/check-ins to see how the market is doing and to discuss any strategies, opportunities that may be relevant to me. My experience with Anthony has been great. I would be happy to recommend him.

  • When working with a financial planner, my expectation is to work with someone who is responsive to changes and who can devise a path forward as we age for the benefit of ourselves and our children. I valued the depth of detail and explanation along with the disclosure of all the variables at play. I would certainly recommend Anthony to my family and friends!

  • I was looking for a financial planner who could provide clarity and show me the best possible way to structure and plan for my retirement. Anthony’s expertise was clearly evident. He is professional, punctual, and answered all my questions and concerns. I would definitely recommend Anthony to my family and friends.

  • We expect a Financial planner to be thorough, detailed and have a strong understanding of their clients' needs. It was a pleasure working with Anthony and his team. He delivered a tremendous package and reviewed his findings in great detail. Anthony's attention to detail, solutions, recommendations and in-depth reports provides a great deal of confidence in his recommendations. We would absolutely refer our family, friends and associates to Anthony.

  • I expect my financial planner to review and discuss my financial goals along with how my goals can be achieved. I valued Anthony reviewing my investments and the projections of what they will equate to when I reach my eventual retirement. Anthony has certainly met my expectations and I would be happy to refer my family and friends.

  • My expectation was to be provided with the best possible advice specific to my situation (as it evolves) and to be provided with objective, evidence-based solutions which will provide me with the maximum financial benefit (and peace of mind). I valued the very thorough process of gathering all pertinent information regarding my estate, pension, income and expenses in order to produce a very detailed and fulsome projection of my current and future financial situation. I really appreciate the time Anthony has taken to answer all of my questions and provide sound advice based on my goals and concerns. I am really looking forward to continuing my investment and financial planning journey with Anthony. I would certainly recommend Anthony to my family and friends!