|
|
|
|
|
|
The purpose of this bill is to provide for the pensionable earnings,
contributions and pensions payable under the Canada Pension Plan to
rise gradually over a period of years to a point where the maximum
pensionable earnings rise from the level of the Industrial Aggregate one
hundred and fifty percent of the Industrial Aggregate and the retirement
pension maximum rises from the current twenty-five percent of the
contributor's pensionable earnings to sixty percent. In addition, as from
January 1, 1998, the pension at age sixty-five would not be less than the
amount set by Statistics Canada as the poverty line income.
|
|
|
|
The Act provides for contributions by the employee and employer
to be prescribed, and the amount of the retirement pension maximum to
be set by order of the Governor in Council. The Act limits the payment
of pensions to the balance in the Canada Pension Plan Account, so that
the Plan is self-funding. Contributions may be set by regulation to meet
the obligations of the new entitlements, and may be adjusted following
an actuarial evaluation of the Plan at each stage of its expansion. For this
purpose, the bill requires a re-evaluation every two years through the
growth phase of the Plan instead of the current five years.
|
|
|
|
Those who work without income, including homemakers, or those
without work in employment or self-employment will have the right to
make employee and employer contributions so that they do not lose the
pension opportunity.
|
|
|
|
A person who has contributed for thirty-five years is deemed to have
reached the age of sixty-five years and to have all the rights the Plan
provides for a person over sixty-five years of age.
|
|
|
|
A Management Board, with guaranteed expertise in its membership,
is established with greater authority than the present Advisory Board.
The Management Board must be consulted prior to the various steps of
the expansion of the Plan being taken and may make recommendations
to the Minister respecting regulations. Its report is laid before
Parliament annually.
|
|
|
|
The amendments will cause the Plan to grow significantly in
contributions and benefits. The expanded Plan will eventually result in
a more adequate retirement pension for all Canadians from the Canada
Pension Plan, reduce the need for private pensions and retirement
savings plans, allow the tax exemptions for such arrangements to be
removed at the appropriate stage and provide a more even-handed tax
treatment for all Canadians. The Canada Pension Plan will then
provide an adequate and fully portable pension for all Canadians.
|
|