Another article:
CPP to sting in near term, help in long term
Garth Turner's take:Under the proposal, contributions to the CPP by employees and employers would gradually increase over seven years starting in 2019. Once the changes are fully implemented in 2025, Canadians would pay between $9 and $42 more into the plan every two weeks.
The CPP changes would eventually provide future retirees with one-third of their average annual incomes, up from one-quarter. They would also increase the maximum amount of income subject to CPP by 14 per cent, to $82,700.
The reform would also provide a tax deduction — instead of a tax credit — on the increased contributions by employees. The federal government expects that adjustment to reduce government revenues by about $710 million by 2021-22.
On the surface it sounds like a (future) benefit for my cohort?This week the T2 gang unveiled Canada Pension Plan changes which will increase premiums for workers and employers by 20%, and eventually (in about two decades) up the amount paid out. The goal is to increase the CPP part of a worker’s retirement income from a quarter to a third – but only up to an income of $82,700, nine years from now. So for someone who averages fifty grand during their working lives, the benefit would go from $12,000 to $16,000.
As you may know, the average monthly CPP cheque is now $643. The OAS – pogey for wheezy, flaccid 65+ wrinklies – is $573, and it’s means-tested. So the average retiree collects less than $15,000 a year, which ain’t enough to live on anywhere. The changes, to be introduced in a couple of years, will cost taxpayers about $250 million annually, reduce overall employment and may actually make retirement harder (since people will save less).