A quick look at the details of the proposed Canada Pension Plan changes

BUSINESS

A quick look at the details of the proposed Canada Pension Plan changes

The Canadian Press Published Thursday, September 8, 2016 6:08PM EDT

A group of retired senior citizens gather for cards at the Citrus County Resource Center in Lecanto, Fla., on Wednesday, Sept. 10, 2014. (AP Photo/John Raoux)

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OTTAWA -- The federal and provincial governments have a tentative agreement to expand the Canada Pension Plan, which would increase payments to retirees and raise premiums. Here are some details of the plan:

Changes would be phased in starting in 2019 and the full enhancement of benefits would be available after about 40 years of contributions.
The income replacement rate will be increased to one-third, from one-quarter of eligible insured earnings, meaning the maximum CPP benefit will be about $17,478 instead of about $13,000.
The upper limit on insured earnings will be raised to $82,700.
The contribution rates for employees and employers would go up by one per cent each.
An average worker earning about $55,000 will pay an additional $7 a month in 2019, increasing to $34 a month by 2023.
The working income tax benefit will be increased to offset the cost of higher contributions to help low-income workers.
Employees would get a tax deduction for contributions to the enhanced portion of CPP.