NOTE: The following is a statement from Minister of Finance and Treasury Board Randy Delorey.
It is important that Nova Scotians have as many options as possible to ensure financial security in their later years. That’s why government has taken steps to improve retirement income security for Nova Scotians.
Government is pleased to announce today, March 2, another important milestone has been reached in the implementation of improvements to the Canada Pension Plan (CPP). The federal legislation to bring the CPP enhancements into force has been proclaimed, as agreed in principle between the federal government and provinces in June 2016. The approved enhancements will improve income security for future generations of Nova Scotians.
Too many Nova Scotians are without the security of their own pension plan, registered retirement savings plans or other retirement savings. The CPP enhancements will help these individuals.
The CPP improvements will:
— increase the maximum CPP benefit by about 50 per cent
— replace one third of average annual earnings on retirement, up from one quarter
— increase the upper earnings limit at which this replacement rate maxes out to about $82,700.
Starting in January 2019 the rate employers and employees pay into CPP will be gradually increased over seven years. The upper earnings limit will be increased over two years starting in 2024. An increase to the Working Income Tax Benefit will help protect low-income earners from the rate increase.
The changes to CPP improve this important retirement safety net while being modest, affordable and giving citizens and businesses time to adjust.
A summary of the enhancements and more information can be found at www.fin.gc.ca/n16/data/16-113_3-eng.asp