OTTAWA — The federal and provincial governments have a tentative agreement to expand the Canada Pension Plan, which would increase payments to retirees and raise premiums. Here are some details of the plan:
-— Changes would be phased in starting in 2019 and the full enhancement of benefits would be available after about 40 years of contributions.
— The income replacement rate will be increased to one-third, from one-quarter of eligible insured earnings, meaning the maximum CPP benefit will be about $17,478 instead of about $13,000.
-— The upper limit on insured earnings will be raised to $82,700.
-— The contribution rates for employees and employers would go up by one per cent each.
-— An average worker earning about $55,000 will pay an additional $7 a month in 2019, increasing to $34 a month by 2023.
-— The working income tax benefit will be increased to offset the cost of higher contributions to help low-income workers.
— Employees would get a tax deduction for contributions to the enhanced portion of CPP.
