## Any questions about CPP?

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
Dogger1953
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### Re: Any questions about CPP?

SILOG - You understand correctly. IMHO they should provide 3 estimates as follows:
1) What your pension would be at age 60/65/70 with no further earnings;
2) What your pension would be at age 60/65/70 if you continued earnings at the same average lifetime rate (the current estimate);
3) What your pension would be at age 60/65/70 if your future earnings were maximum
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SoninlawofGus
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### Re: Any questions about CPP?

Yeah, not hard to do -- just simple math. As it is, it's misleading without knowing the formula.

gsp_
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### Re: Any questions about CPP?

Dogger1953 wrote:SILOG - You understand correctly. IMHO they should provide 3 estimates as follows:
1) What your pension would be at age 60/65/70 with no further earnings;
2) What your pension would be at age 60/65/70 if you continued earnings at the same average lifetime rate (the current estimate);
3) What your pension would be at age 60/65/70 if your future earnings were maximum
It's been forever since I've seen a QPP estimate but IIRC they provides two of those, my best guess is the first two. Those with more regular contributions and summaries will correct me. Seems silly for CPP not to do the same.

longinvest
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### Re: Any questions about CPP?

gsp_ wrote:
Dogger1953 wrote:SILOG - You understand correctly. IMHO they should provide 3 estimates as follows:
1) What your pension would be at age 60/65/70 with no further earnings;
2) What your pension would be at age 60/65/70 if you continued earnings at the same average lifetime rate (the current estimate);
3) What your pension would be at age 60/65/70 if your future earnings were maximum
It's been forever since I've seen a QPP estimate but IIRC they provides two of those, my best guess is the first two. Those with more regular contributions and summaries will correct me. Seems silly for CPP not to do the same.
More precisely, QPP statements provide:
1) What your pension would be at age 60 and 65 with no further earnings;
2) What your pension would be at age 60 and 65 if you continued earnings at the same average as the last years of contributions.
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Hopetoretire
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### Re: Any questions about CPP?

I just received a strange letter from Service Canada about my CPP. It says that they are increasing my monthly benefit to \$384.03 (am immigrant and applied for this when I was 60). And that they owe me \$387.37 and will send to me soon. BUT I've been getting \$389.87 CPP every month, so this is not an increase but a reduction. I have continued working at the same salary as the previous 4 years so company is still contributing on my behalf.

Any ideas on what is going on here please? I know it's only \$5 per month, but I would like to understand anyhow.

Dogger1953
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### Re: Any questions about CPP?

Hopetoretire wrote:I just received a strange letter from Service Canada about my CPP. It says that they are increasing my monthly benefit to \$384.03 (am immigrant and applied for this when I was 60). And that they owe me \$387.37 and will send to me soon. BUT I've been getting \$389.87 CPP every month, so this is not an increase but a reduction. I have continued working at the same salary as the previous 4 years so company is still contributing on my behalf.

Any ideas on what is going on here please? I know it's only \$5 per month, but I would like to understand anyhow.
The amount of \$389.87 that you're currently receiving is likely comprised of your regular CPP retirement pension plus one or more "post-retirement benefits" (PRBs) for earnings that you had since you started receiving your CPP. The letter refers just to the amount of regular CPP retirement pension, so it is a true increase, probably due to your earnings in the year that you started receiving your CPP (likely 2014?).
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CROCKD
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### Re: Any questions about CPP?

Cessation of CPP Sharing.
This is a question about CPP Sharing that was supposed to have ended at the time of marriage dissolution.
According to my files I entered into a CPP pension sharing agreement in January 2005 with my wife (now my ex). The pensions were split (not quite equally, because as I was told at the time I had worked for some years in Quebec under QPP)
I have a letter from HR Canada showing my monthly amount before sharing as \$624.17 and after sharing as \$575.16
The letter has a section in BOLD saying that they must be notified among other conditions if the marriage ends. That's all it says "THAT THEY MUST BE NOTIFIED"
Consequently in Feb. 2008 I duly wrote them informing HR Canada of my divorce as requested.
I got back a letter from Service Canada saying they could not accept my request without all sorts of certified copies of my separation and divorce agreements.
I was feeling pretty bloody minded because of the end of my marriage of over 20 years and if I could have got hold of the SC lackey who sent me the letter I would have rammed it up you know where.
So I threw the letter in my file where it has resided since.
My ex and I have continued to share our CPPs now into 2016. As far as I know she never officially approached SC although I did mention it once or twice.
Obviously I have received less and she has received more over these past 8 years - not that I cared about that.
HOWEVER what is the situation officially now if SC Should get the documentation they asked for?
I am not anxious to have to redo 8 years of tax returns or cause my ex to have to repay several thousands of dollars.
What is the best course of action at this stage? I was inclined to let sleeping dogs lie until I thought that I might pose the question here.
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Dogger1953
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### Re: Any questions about CPP?

CROCKD - Under the CPP legislation, the pension-sharing (officially called "Assignment") should have ended long ago and should now be adjusted retroactively when done. Since you would be the one to gain though, if you don't want it to be cancelled retroactively, I suspect Service Canada might cancel it currently if you and your ex-wife complete Form ISP1014, available at: http://www.esdc.gc.ca/en/cpp/sharing.page
DR Pensions Consulting (http://www.DRpensions.ca)

SoninlawofGus
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### Re: Any questions about CPP?

My wife works for the public service (PSAC). I recently became aware that she has 2.75 years of CPP earnings before joining the government. Is there anything special to be aware of here (such as with bridge benefits). Can I assume that those 2.75 years would be treated like regular CPP earnings, payable at any point over the age of 60, using the formulas discussed above? In other words, those CPP years would be treated totally separately from the government pension + CPP amounts. Do I have that right?

Stan_W
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### Re: Any questions about CPP?

I just read this article regarding postponing starting CPP and OAS benefits to age 70.

Do the "no income" years after 65 affect the amount of the CPP? Assuming that I will get the maximum CPP, does this mean that at 70 I receive 1.42 times max?

My wife (three years younger) will have a small CPP pension and will likely retire at 62. What would be the effect on the survivor benefits if I died first?

I calculate that our income will drop to about 60% of our working income in retirement if I were to take CPP and OAS at 65 and my wife to start CPP at 62.

Dogger1953
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### Re: Any questions about CPP?

SoninlawofGus wrote:My wife works for the public service (PSAC). I recently became aware that she has 2.75 years of CPP earnings before joining the government. Is there anything special to be aware of here (such as with bridge benefits). Can I assume that those 2.75 years would be treated like regular CPP earnings, payable at any point over the age of 60, using the formulas discussed above? In other words, those CPP years would be treated totally separately from the government pension + CPP amounts. Do I have that right?
I'm not sure that I correctly understand your question, but the CPP earnings prior to working for PSAC are considered the same as her earnings while working for PSAC. They will all be totaled together and will create one CPP retirement pension payable anytime after age 60.
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Dogger1953
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### Re: Any questions about CPP?

Stan_W wrote:I just read this article regarding postponing starting CPP and OAS benefits to age 70.

Do the "no income" years after 65 affect the amount of the CPP? Assuming that I will get the maximum CPP, does this mean that at 70 I receive 1.42 times max?

My wife (three years younger) will have a small CPP pension and will likely retire at 62. What would be the effect on the survivor benefits if I died first?

I calculate that our income will drop to about 60% of our working income in retirement if I were to take CPP and OAS at 65 and my wife to start CPP at 62.

Stan - Any "no income" years after age 65 are dropped out in the calculation of your CPP, so your CPP at age 70 will indeed be 1.42 times max.

The amount of your CPP survivor's pension isn't affected by if/when you take your CPP retirement pension.
DR Pensions Consulting (http://www.DRpensions.ca)

SoninlawofGus
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### Re: Any questions about CPP?

Hi Dogger1953. Whoa, that's a revelation. So, if those years are included in her pension, would you know how that works into the bridge benefit -- which is an amount that is bridged until the age of 65? In theory, she could retire at 50 (she's younger than me) and get that benefit for 15 years. But would those extra CPP years be included in that calculation?

If I use the basic pension calculator here, there is no way to include the extra CPP years, so that bridge benefit calculation only includes years with the government.

Added: I'm thinking that there's no way non-public service years could be included in my wife's bridge benefit calculation. If CPP was fully integrated, that would mean someone could work, say 25 years outside of government, join the government, then retire early and get the full bridge benefit until age 65.

Dogger1953
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### Re: Any questions about CPP?

SoninlawofGus wrote:Hi Dogger1953. Whoa, that's a revelation. So, if those years are included in her pension, would you know how that works into the bridge benefit -- which is an amount that is bridged until the age of 65? In theory, she could retire at 50 (she's younger than me) and get that benefit for 15 years. But would those extra CPP years be included in that calculation?

If I use the basic pension calculator here, there is no way to include the extra CPP years, so that bridge benefit calculation only includes years with the government.

Added: I'm thinking that there's no way non-public service years could be included in my wife's bridge benefit calculation. If CPP was fully integrated, that would mean someone could work, say 25 years outside of government, join the government, then retire early and get the full bridge benefit until age 65.
Her CPP retirement pension will include all earnings, but her bridge benefit will only count the years that she worked for the government. The two calculations are entirely separate.
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Stan_W
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### Re: Any questions about CPP?

Dogger1953 wrote:
Stan_W wrote:I just read this article regarding postponing starting CPP and OAS benefits to age 70.

Do the "no income" years after 65 affect the amount of the CPP? Assuming that I will get the maximum CPP, does this mean that at 70 I receive 1.42 times max?

My wife (three years younger) will have a small CPP pension and will likely retire at 62. What would be the effect on the survivor benefits if I died first?

I calculate that our income will drop to about 60% of our working income in retirement if I were to take CPP and OAS at 65 and my wife to start CPP at 62.

Stan - Any "no income" years after age 65 are dropped out in the calculation of your CPP, so your CPP at age 70 will indeed be 1.42 times max.

The amount of your CPP survivor's pension isn't affected by if/when you take your CPP retirement pension.
Thanks Dogger.

Since my birthday is in November, I plan to retire in January of the year following my 65th birthday so that my pre-retirement allowance and accumulated vacation are paid in the next tax year. Is there an option to not pay into CPP? (It seems that I would have to be taking CPP in order to opt out) I would probably have about six months pay and be close to the YMPE for that year.

If I can't opt out, is this just lost money or does it somehow increase my CPP?

SoninlawofGus
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### Re: Any questions about CPP?

Dogger1953 wrote: Her CPP retirement pension will include all earnings, but her bridge benefit will only count the years that she worked for the government. The two calculations are entirely separate.
That makes sense, thanks. I could see how it could create a dilemma for someone with decades outside of the public service and on a few years within it. I can imagine scenarios in which people might want to give up the bridge benefit in order to take CPP early. Fortunately, we don't have to worry about that.

bcjmmac
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### Re: Any questions about CPP?

My understanding is that the bridge benefit is totally isolated from when you actually start to draw CPP benefits. In other words, your bridge benefit ends on your 65th birthday, no matter when you actually start drawing CPP. At least that is how my fed pension is structured.

Dogger1953
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### Re: Any questions about CPP?

Stan_W wrote:Thanks Dogger.

Since my birthday is in November, I plan to retire in January of the year following my 65th birthday so that my pre-retirement allowance and accumulated vacation are paid in the next tax year. Is there an option to not pay into CPP? (It seems that I would have to be taking CPP in order to opt out) I would probably have about six months pay and be close to the YMPE for that year.

If I can't opt out, is this just lost money or does it somehow increase my CPP?
Stan - Unfortunately you can't opt out of paying CPP contributions unless you're receiving your CPP, and also unfortunately if you're already at the maximum any further contributions are wasted.
DR Pensions Consulting (http://www.DRpensions.ca)

dsred
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### Re: Any questions about CPP?

Dogger1953 wrote:
Stan_W wrote:Thanks Dogger.

Since my birthday is in November, I plan to retire in January of the year following my 65th birthday so that my pre-retirement allowance and accumulated vacation are paid in the next tax year. Is there an option to not pay into CPP? (It seems that I would have to be taking CPP in order to opt out) I would probably have about six months pay and be close to the YMPE for that year.

If I can't opt out, is this just lost money or does it somehow increase my CPP?
Stan - Unfortunately you can't opt out of paying CPP contributions unless you're receiving your CPP, and also unfortunately if you're already at the maximum any further contributions are wasted.
WHATTTTTTTT? My understanding is that no CPP or EI premiums are payable on pension income (i.e. OMERS).

I'm confused. This might affect my planned retirement.

Dogger1953
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### Re: Any questions about CPP?

dsred wrote:

WHATTTTTTTT? My understanding is that no CPP or EI premiums are payable on pension income (i.e. OMERS).

I'm confused. This might affect my planned retirement.
dsred - You're correct that no CPP contributions are payable on pension income, but the question was about accumulated vacation leave etc, which I believe is equivalent to salary.
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bcjmmac
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### Re: Any questions about CPP?

Stan. In your situation transferring as much of your "retirement" allowances to a RRSP may be the most beneficial route as that \$ will be exempt from taxes (for now), CPP & EI premiums. If you started pre-1996, read the following link regarding the extra amounts you can transfer. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... r-eng.html

Your other option may be to simply take your leave & not retire until it runs out (no need to go to work), then wait until your next birthday to start CPP & get an increased amount.

Have you attended a SCAN (second career assistance network) seminar? They can give detailed individual advice on what is the most favorible route to maximize your benefits.

Stan_W
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### Re: Any questions about CPP?

Dogger1953 wrote:
Stan_W wrote:Thanks Dogger.

Since my birthday is in November, I plan to retire in January of the year following my 65th birthday so that my pre-retirement allowance and accumulated vacation are paid in the next tax year. Is there an option to not pay into CPP? (It seems that I would have to be taking CPP in order to opt out) I would probably have about six months pay and be close to the YMPE for that year.

If I can't opt out, is this just lost money or does it somehow increase my CPP?
Stan - Unfortunately you can't opt out of paying CPP contributions unless you're receiving your CPP, and also unfortunately if you're already at the maximum any further contributions are wasted.
Thanks Dogger, that's how I read it, but it just seems strange to be paying into a pension for no benefit. It might make sense to forgo the year's CPP income to increase future years by 7%, but having to contribute an additional \$2544 may tip the balance in favour of taking the CPP at 65.
Stan. In your situation transferring as much of your "retirement" allowances to a RRSP may be the most beneficial route as that \$ will be exempt from taxes (for now), CPP & EI premiums. If you started pre-1996, read the following link regarding the extra amounts you can transfer. http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... r-eng.html

Your other option may be to simply take your leave & not retire until it runs out (no need to go to work), then wait until your next birthday to start CPP & get an increased amount.

Have you attended a SCAN (second career assistance network) seminar? They can give detailed individual advice on what is the most favorible route to maximize your benefits.
Thanks bcjmmac. I started in 1995, so it looks like only \$2000 would be eligible to be rolled into the RRSP. Other than that, the RRSPs are maxed.

I'll be over 65, so I'll take the payout for the leave and accumulated vacation and begin my work pension, since waiting until the leave is up would only add a few months of service to the pension. Also, whether I take the leave and vacation or take the payout, I'll have to pay CPP on it.

It looks like the SCAN seminars are for the armed forces. We do have a 3 hour seminar offered at work, but I have over a year to go, so I haven't attend yet. I'd like to get my questions ready before I go.

Edit for typo

Hopetoretire
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### Re: Any questions about CPP?

"The amount of \$389.87 that you're currently receiving is likely comprised of your regular CPP retirement pension plus one or more "post-retirement benefits" (PRBs) for earnings that you had since you started receiving your CPP. The letter refers just to the amount of regular CPP retirement pension, so it is a true increase, probably due to your earnings in the year that you started receiving your CPP (likely 2014?)."

You're correct - I received \$406 today (wow nuff for Harveys burgers) which is \$19 increase! Is it supposed to be pro-rated on my additional work years in 2015/2016 or is that next year's CPP?

Dogger1953
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### Re: Any questions about CPP?

Hopetoretire wrote:"The amount of \$389.87 that you're currently receiving is likely comprised of your regular CPP retirement pension plus one or more "post-retirement benefits" (PRBs) for earnings that you had since you started receiving your CPP. The letter refers just to the amount of regular CPP retirement pension, so it is a true increase, probably due to your earnings in the year that you started receiving your CPP (likely 2014?)."

You're correct - I received \$406 today (wow nuff for Harveys burgers) which is \$19 increase! Is it supposed to be pro-rated on my additional work years in 2015/2016 or is that next year's CPP?
The current increase would likely just be for your earnings from the year that you first started receiving CPP (was it 2014?). If so, your 2015 would have created a PRB effective January 2016 and your 2016 earnings will create a PRB which will be effective January 2017.
DR Pensions Consulting (http://www.DRpensions.ca)

pmj
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### Re: Any questions about CPP?

Hi - with respect to Child-Rearing Dropout - must it be applied only to the years when one had a child under 7 - or can it be applied to other years that might have lower earnings (relative to YMPE) than those particular years?
Peter

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