Finance ministers reach deal to expand Canada Pension Plan

[Flash Walken]

Originally Posted by nik-

I'm not sure why you're being so flippant about this.

$2400 extra a year is not small change.

What are we talking about, that CPP costs are going up or that it won't be here in 30 years?

Or, *GASP!* are we talking about CCP costs going up AND it not being there at the same time?

That sounds particularly horrendous.

[mrkajz44]

My biggest beef with how the media is portraying it is similar to the carbon tax. They use a "real life example" to show the difference in premiums you will be paying, but they are cherry picking a best case scenario. Here is the infographic from the Financial Post (spoilered for size)

Spoiler!

They pick $55k/year as their example and say they will be paying just $34 more per year with the new plan. Of course the new plan would not affect them that much as they were just barely maxing out their contributions, so the increase in the cap to $83k makes no difference to them.

Also funny, that infographic shows 0.25% and 0.33% when they meant 25% and 33%, but no one has fixed it yet.

[Jason14h]

It's only $200/month.

or $6.65 a day! The cost of a Starbucks coffee!

Bunch on whiners!

[nik-]

Originally Posted by Flash Walken

What are we talking about, that CPP costs are going up or that it won't be here in 30 years?

Or, *GASP!* are we talking about CCP costs going up AND it not being there at the same time?

That sounds particularly horrendous.

It had 75 years of solvency before this change and would have cleared the largest retirement hurdle well before that time.

Originally Posted by Jason14h

or $6.65 a day! The cost of a Starbucks coffee!

Bunch on whiners!

Or, at the new cap, more than an entire extra paycheck.

[Flash Walken]

Originally Posted by nik-

It had 75 years of solvency before this change and would have cleared the largest retirement hurdle well before that time.

So then with the augmented investing taking place, surely it will be there in 30 years when CliffFletcher needs it?

[CliffFletcher]

I am managing my own retirement, with assumptions of CPP and OAS income factored into it. And I do have trust in the fundamental viability of the CPP in principle. What I don't have trust is in a pension fund that's linked to the massively underfunded public sector pension plans. The public sector Boomers are going to take down those funds like locusts, and leave a dustblown wasteland in their wake.

[nik-]

Originally Posted by Flash Walken

So then with the augmented investing taking place, surely it will be there in 30 years when CliffFletcher needs it?

Did I argue that it wouldn't be there?

I'm pissed off about the hit.

"ONLY $200 extra a month" is a significant amount of money.

[Flash Walken]

Originally Posted by OMG!WTF!

I suspected this might be the case...

http://business.financialpost.com/fp...-pension-plans

CPP is folded into the vastly underfunded public sector plans so you increase CPP payments which are funded, and that decreases the burden on union and other public sector pensions. Just a big ole civil servant subsidy.

Originally Posted by CliffFletcher

Well that sucks. My faith that the money will be there when I need it in 30 years just evaporated.

Originally Posted by Flash Walken

Why aren't you managing your own retirement portfolio like the rest of the genius' in this thread?

Originally Posted by nik-

I'm not sure why you're being so flippant about this.

$2400 extra a year is not small change.

Originally Posted by Flash Walken

What are we talking about, that CPP costs are going up or that it won't be here in 30 years?

Or, *GASP!* are we talking about CCP costs going up AND it not being there at the same time?

That sounds particularly horrendous.

Originally Posted by nik-

It had 75 years of solvency before this change and would have cleared the largest retirement hurdle well before that time.




Or, at the new cap, more than an entire extra paycheck.

Originally Posted by Flash Walken

So then with the augmented investing taking place, surely it will be there in 30 years when CliffFletcher needs it?

Originally Posted by CliffFletcher

I am managing my own retirement, with assumptions of CPP and OAS income factored into it. And I do have trust in the fundamental viability of the CPP in principle. What I don't have trust is in a pension fund that's linked to the massively underfunded public sector pension plans. The public sector Boomers are going to take down those funds like locusts, and leave a dustblown wasteland in their wake.

Originally Posted by nik-

Did I argue that it wouldn't be there?

I'm pissed off about the hit.

"ONLY $200 extra a month" is a significant amount of money.

C'mon, nik, follow along here.

[nik-]

I'm not CliffFletcher. I literally don't care what he posted, I'm talking about the extra ding.

follow along here

[OMG!WTF!]

Originally Posted by nik-

Did I argue that it wouldn't be there?

I'm pissed off about the hit.

"ONLY $200 extra a month" is a significant amount of money.

$100 bimonthly. Final offer and for an unlimited time only.

This is sad but are cpp deductions after tax? I assume they are but can't find the real answer.

[Slava]

Originally Posted by OMG!WTF!

I suspected this might be the case...

http://business.financialpost.com/fp...-pension-plans

CPP is folded into the vastly underfunded public sector plans so you increase CPP payments which are funded, and that decreases the burden on union and other public sector pensions. Just a big ole civil servant subsidy.

A lot of smoke and mirrors in that article for sure. I think what it says is that the end result for a public sector pensioner won't change with the increase to CPP because that is factored in? It doesn't mean that the increase in CPP shelters the fact that the pensions might have unfunded liabilities though.

To me that is the author trying to mix in his dislike for public sector pensions with the changes here to CPP. If I understand that correctly though, its disingenuous.

[OMG!WTF!]

Originally Posted by Slava

A lot of smoke and mirrors in that article for sure. I think what it says is that the end result for a public sector pensioner won't change with the increase to CPP because that is factored in? It doesn't mean that the increase in CPP shelters the fact that the pensions might have unfunded liabilities though.

To me that is the author trying to mix in his dislike for public sector pensions with the changes here to CPP. If I understand that correctly though, its disingenuous.

Seems like a "happy consequence" kind of thing for the government For example when TFSA's were created one of the first FAQ's they answered was "No. This will not effect anyone's eligibility for OAS payments".

[albertGQ]

Originally Posted by OMG!WTF!

$100 bimonthly. Final offer and for an unlimited time only.

This is sad but are cpp deductions after tax? I assume they are but can't find the real answer.

$100 bi monthly works out to only $600/ year

[Fuzz]

http://www.dailywritingtips.com/how-often-is-bimonthly/

[OMG!WTF!]

I meant biweekly didn't I? Yikes. I really should have creatively financed more crap in my life.

[Cecil Terwilliger]

No you meant semi monthly. Bi weekly would be 2600/yr.

[opendoor]

Originally Posted by OMG!WTF!

I suspected this might be the case...

http://business.financialpost.com/fp...-pension-plans

CPP is folded into the vastly underfunded public sector plans so you increase CPP payments which are funded, and that decreases the burden on union and other public sector pensions. Just a big ole civil servant subsidy.

Conversely, anyone with a pension plan like that will see increased contributions without getting a single extra dollar back.

Ultimately this is largely higher earners subsidizing lower earners' pensions. People at $50K and under will see very little increase in their contributions while people earning more than that will pay more. Which makes sense after the tax cuts that saw $90-200K earners see the biggest relief and below median earners get virtually nothing.

I'd be curious how the numbers work out when you consider the tax cuts and pension increases. Are people earning $60-200K having more of their salary clawed back on payday than they were a year ago? I'm not sure.

[GGG]

Originally Posted by OMG!WTF!

$100 bimonthly. Final offer and for an unlimited time only.

This is sad but are cpp deductions after tax? I assume they are but can't find the real answer.

CPP deductions use your before tax income.

You get a non refundable tax credit for your contribution but it's at the base rate rather than the marginal rate.

[mrkajz44]

Originally Posted by GGG

CPP deductions use your before tax income.

You get a non refundable tax credit for your contribution but it's at the base rate rather than the marginal rate.

I just got a tax insight blast from PwC saying part of the change is to make the CPP contributions tax deductible (marginal rate) rather than just a tax credit (base rate). Since it's so fresh I'm not sure if that's true or not, but that does make the hit a little more manageable with the new higher limit.

[V]

Originally Posted by opendoor

Which makes sense after the tax cuts that saw $90-200K earners see the biggest relief and below median earners get virtually nothing.

What now? I'm in that range and Trudeau has takeb a giant turd on my finances. What relief have I seen?