By 2050, an amended Canada Pension Plan(CPP)would have plan assets $29 billion lower than projected under a previous actuarial report.
That assumes there is a 9.9% contribution rate. The report also said expenditures would be $520 million or 0.2% higher than earlier projected, also by 2050.
The minimum contribution rate required to financially sustain the current plan and the proposed disability amendment is 9.79% for years 2007 and after.
The report was made by the Office of the Superintendent of Financial Institutions and the Office of the Chief Actuary because late last month Bill C-36 was proposed to amend the Canada Pension Plan and Old Age Security Act by Minister of Human Resources and Social Development, Diane Finley.
The amendment, among other things, stated:
-As recommended by federal-provincial-territorial Finance ministers, this amendment would fully integrate the CPP’s full funding provision into actuarial reporting and contribution rate setting. The full funding provision requires that benefit enrichments or new benefits be paid for in full so their costs are not passed on to future generations.
-The amendments set out reporting requirements and clarify rate-setting in the presence of such costs. They also provide for regulations to give specific direction to the Chief Actuary for calculating costs related to new or enhanced benefits.
Long-term Contributors-Canada Pension Plan Disability(CPPD)
-As recommended by federal-provincial-territorial Finance ministers, contributors who made 25 years or more of contributions would meet the eligibility criteria for earnings and contributions with valid contributions in 3 of the last 6 years instead of the current requirement of 4 of the last 6 years. Applicants will also have to meet existing CPPD medical criteria to qualify for the benefits.
-The amendment extends CPPD coverage to thousands of contributors with a long history of labour force attachment. It also represents the first enhancement of CPP benefits since the 1998 changes.
CPP: Business Transformation Amendment
-Statement of Contributions(SOC)online: The legislation currently specifies that a SOC may be requested only once a year. It is proposed to amend the legislation to permit contributors to request a SOC more than once a year.
CPP: Administrative Amendment
-The proposed changes would amend the CPP to allow former common-law partners to apply for a credit split more than four years after the date of separation where both former common-law partners agree in writing.
Proposed Common OAS/CPP Amendments
Provisions for electronic services
-Provisions for full electronic services currently do not exist for the OAS and CPP. It is proposed to amend the CPP and the OAS Act in order to provide the necessary authority for electronic service delivery and transactions.
Charging of interest
-Authority would be provided in the CPP and OAS Act to set the terms and conditions for the charging of interest.
Penalty provisions
-Existing penalty provisions(not in force)of both Acts would be updated and put into force. They could impose financial sanctions in cases of deliberate misrepresentation.
Information sharing
-The proposed changes will expand the group of third parties to whom a contributor’s personal information may be provided to.
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