The Canada Pension Plan is a pension plan for the paid work force. It is funded by equal contributions from employers and employees.OWN Recommendations:

1. Maintain CPP/QPP as a public pension plan.
2. Retain the benefit provisions of the CPP since reducing any one benefit would penalize unfairly specific contributors and their families.
3. Develop a "drop-out" provision for contributors who are caregivers of ill, disabled, or frail family members.
4. Maximum pensionable earnings be raised from $36,000 to at least $60,000. This would increase benefits proportionally and higher income earners would contribute more to the fund.

Government CPP Legislation Tabled 1997

1. Contribution rates rise to 9.9% of earned income over six years - half paid by employer and half by employee (now 5.8% of earnings).
2. Pension will be based on the average of the year’s maximum pensionable earnings in the last 5 years (instead of 3) prior to starting the pension. This reduces pensions.
3. Disability pensions based on applicant’s having worked 4 of the last 6 years rather than 5 of 10 years - reduces criteria for eligibility.
4. Retirement pensions for persons on disability will be based on maximum pensionable earnings at time of disability (applies to those not yet 65). Reduces pensions since now based on current year’s maximum pensionable earnings.
5. Death benefit will be reduced to $2,500 instead of the current $3,500. This benefit is taxable.
6. Accrued reserve fund will be for 5 years instead of 2.
7. Invested in a diversified portfolio of securities rather than non-negotiable provincial bonds.
8. Management of pension funds given to an Investment Board.
9. "Drop-out" provisions are maintained in the CPP plan for all contributors between 18 and 70 years of age. They are:
   • all the years in which a contributor is receiving a disability pension
   • years in which contributor has a child under 7 years of age
   • an additional 15% of the remaining years
   • "Drop-out" provisions must be applied for prior to retirement.

Pension Committee, April 30, 1998
Revised March 1999

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