How Will the Canada Pension Plan Changes Affect You?

There has been a lot of buzz going on about the changes within the Canada Pension Plan (CPP) which are part of the Keeping Canada’s Economy and Jobs Growing Act.

Many of the amendments are intended to provide more financial flexibility depending on individual’s chosen retirement path and to encourage Canadians to work longer before drawing from government pension.
The facts are clear, people are living longer.

Did you know that changes to government social programs have been taking place around the world? This concept has already been adapted in other countries where they have changed their retirement standards from the arbitrarily chosen age of 65 – and Canada has to jump on the bandwagon.

Though change is not easy, Canada has to take necessary steps to ensure that we remain competitive on the world stage.

While life expectancy continues to increase (from age 72 in 1980 to 81 years old in 2011) it is putting more strain on our government social programs. With future generations being pressured by the public cost of retirement and a decreasing workforce – there is now more than ever a need for these changes to be implemented. (more…)

New CPP Requirements for Employer-Paid Disability Benefits

The federal government recently introduced amendments to the Canada Pension Plan (CPP) through Budget Bill C-13.

One aspect of Bill C-13 that amends the CPP is that employers who provide disability benefits to their employees through self-funded or administration services only (ASO) arrangements (with no insurance principles) must deduct CPP contributions from such benefits.

The CPP amendments do not impact insured short-term disability (STD) and long-term disability (LTD) plans.

This amendment makes the Canada Pension Plan Act consistent with the Employment Insurance Act, which requires that employers and employee Employment Insurance (EI) premiums be made on ASO disability benefit payments. (more…)

Can changes in the economy impact my benefit program?

By: Cameron Campbell

Depending on the size of your organization you may feel the impact of changes in the economy differently. While changes over the past two years have adversely affected many businesses, few have taken the time to consider the impact to their benefit plan.

Studies have shown that in times of economic uncertainty, occurrences for some benefit claims increase such as Long Term Disability (LTD), dental care and prescription drugs. Employees often feel insecure about their future and the stability of their company (or job). This factors into increased claiming patterns as an employee may feel the need to maximize their coverage.

Fluctuations in Demographics and Benefit Claims

As decision makers for businesses we are often concerned with the financial well being of our company during times of economic instability. For many employees the concern is also for their own financial future. As a result, employees tend to utilize benefits out of fear that the benefits may no longer be available to them, therefore overall claims increase in times of uncertainty which leads to higher costs for the plan and additional financial strain on the employer.   (more…)