OTTAWA — The Harper government says it will explore giving people the option to pump more of their earnings into the Canada Pension Plan to boost their retirement savings.
The government will consult experts and stakeholders this summer as it looks for ways to allow Canadians to make voluntary add-on contributions to the Canada Pension Plan, Finance Minister Joe Oliver told the House of Commons on Tuesday.
"We believe that Canadians are best placed to decide how to save for their retirement with voluntary options," Oliver said in a statement.
"That is why we intend to consult on giving Canadians the voluntary option to contribute more to the Canada Pension Plan to supplement their retirement savings."
Oliver emphasized that people should have choices when it comes to their retirement savings, rather than mandatory payments.
He said the government aims to build on other voluntary savings options already available, such as the pooled, registered pension plan and the tax-free savings account.
Provinces such as Ontario have lead a provincial push to enhance the CPP, but Ottawa has said it wanted to avoid saddling employees and employers with higher premiums.
Instead, Ottawa has endorsed other pension-related reforms.
Retirement income is expected to be a weighty election issue.
Pensioners can draw on a variety of programs in retirement
The Harper government will look at allowing people to stash more of their earnings into the Canada Pension Plan to boost retirement savings.
Following is a quick look at various programs available to seniors.
The Canada Pension Plan: A monthly payment for those who have worked and made at least one valid contribution to the plan. Standard pensionable age is 65, but people may take a permanently reduced pension as early as age 60 or take a permanently increased pension after age 65.
Old age security: A monthly payment available to most people 65 years of age and older who meet the Canadian legal status and residence requirements. Employment history is not a factor in eligibility.
Guaranteed income supplement: Available to legal residents who get old age security cheques and whose annual income is below a certain amount.
Monthly allowance: For those age 60 to 64 whose spouse or common-law partner gets an old age security cheque and is eligible for the guaranteed income supplement.
Registered retirement savings plan: Allows people to save for retirement with tax-deductible contributions. Income earned in the plan is usually exempt from tax as long as the funds remain in the plan. Taxes generally apply when assets are withdrawn.
Pooled registered pension plan: Applies to people employed or self-employed in the Northwest Territories, Nunavut or Yukon, those who work in a federally regulated business or industry for an employer who chooses to participate in a pooled plan, or those who live in a province that has the required provincial standards legislation in place. Your contributions, your employers' contributions and any lump-sum contributions, are all pooled together.
Tax-free savings account: Allows contributions of up to $5,500 a year (rising to $10,000 if existing budget legislation passes). Investment income is tax free.
