Understanding CPP and your pension
February 25, 2019
Recent enhancements to the Canada Pension Plan (CPP) won’t affect your current contribution rates to Ontario Teachers’.
What are the CPP enhancements?
Effective January 1, 2019, CPP is phasing in higher contributions and benefits, and introduced a new tier of earnings above the Year’s Maximum Pensionable Earnings (YMPE). The new limit is called the Year’s Additional Maximum Pensionable Earnings (YAMPE). The YAMPE limit will increase each year and is estimated to be about $79,400 when it’s fully phased in after 2025. The YMPE will also continue to increase each year.
Learn more about the CPP enhancements.
How does your pension work with CPP?
We use a two-tier formula to calculate your contributions to our plan. Contributions are lower on earnings up to the YMPE (10.4%), and higher on earnings above it (12%). In 2019, the YMPE is $57,400. Under current plan terms, we don’t use the YAMPE as part of the formula that determines your contribution rates.
If you retire before you turn 65 and aren't collecting a CPP disability pension, we’ll provide a bridge benefit. The bridge benefit is intended to supplement your retirement income until age 65 when you’re eligible for an unreduced CPP pension. The month after you turn 65, or immediately if you collect a CPP disability pension, the bridge benefit ends and the amount you receive from us decreases.
Visit You and CPP to learn more about how your pension is integrated with CPP.