George & Bell Consulting

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Description of the CPP Enhancement

General Assumptions

  1. Retirement occurs at age 65.

  2. The age that the user enters should be their age at July 1, 2016.

  3. The earnings that the user enters should be their 2016 annual employment income.

  4. The user has not received nor will receive CPP disability benefits.

  5. The user works and contributes to the CPP for their full career.

  6. Users have sufficient earnings/employment/contribution history to generate a CPP benefit at retirement proportionate to their 2016 earnings vs. 2016 YMPE.

  7. The user's 2016 earnings as a proportion of the 2016 YMPE is representative of the same proportion for the user's entire career.

  8. Salary and average wage inflation increases are assumed at 3.0% per year.

  9. Benefits under the enhancement will be “fully funded”; we have assumed a phase-in of benefits of 40 years. For the first part of the enhancement, the phase-in occurs from 2019 through 2058. For the second part, the phase-in occurs from 2025 through 2064.

  10. There are additional adjustments to the projected benefits to reflect the 2019-2023 phase-in of the extra 1% contributions and the 2024-2025 phase-in of the 4% contributions on the increased YMPE.

  11. The average monthly contributions shown are based on the contributions made each year starting in 2016 (or at age 18 if later), over the remaining number of years until the user reaches 65, taking into account the increases in salary and average wage inflation. Actual contributions will be lower than the average in earlier years and higher than the average as the user approaches age 65.

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