For immediate release
July 7, 2005
OTTAWA, Reg Alcock, President of the Treasury Board, announced today that contribution rates under the pension plans for members of the Public Service, the Canadian Forces, and the Royal Canadian Mounted Police will increase starting in January 2006.
"The increase in member contribution rates reflects the Government of Canada's goal of ensuring that the costs of public sector pension plans are shared in a balanced way between the plan members and the Government, and ultimately, the Canadian taxpayer," said Minister
Alcock.
Contribution rates will increase beginning in January 2006 for active pension plan members in the three major public sector pension plans, namely the Public Service Pension Plan, the Canadian Forces Pension Plan, and the Royal Canadian Mounted Police Pension Plan.
"The current contribution rates are among the lowest when compared to other major public sector pension plans," Minister Alcock added. "This increase ensures the long-term sustainability of the three pension plans."
The current plan member contribution rates are 4 per cent on the portion of salary up to the maximum covered by the Canada Pension Plan (CPP) or the Quebec Pension Plan (QPP) - $41,100 for 2005 - and 7.5 per cent on the portion of salary above this maximum.
Starting in January 2006, plan member contributions will increase each year by 0.3 per cent. They will increase until 2013, on those earnings up to the maximum covered by the CPP/QPP, and until 2008 on those earnings over the maximum covered by the CPP/QPP.
Minister Alcock also announced that the ministers responsible for the three pension plans (the President of the Treasury Board, the Minister of National Defence and the Minister of Public Safety and Emergency Preparedness) have recommended an amendment to the pension plans to change the formula by which plan benefits are coordinated with the CPP or QPP benefits in plan members' favour.
"Pension plan benefits are reduced once members turn 65, which is the normal age of eligibility for CPP or QPP benefits," Minister Alcock said. "By lowering the reduction factor, beginning in 2008, the pension reduction for individuals reaching age 65 in 2008 and beyond would be smaller than if the existing reduction factor was applied."
For more detailed information, please visit the Treasury Board of Canada Secretariat Web site
(http://www.tbs-sct.gc.ca). - 30 -
Lise Jolicoeur
Press Secretary
Office of the President of the Treasury Board and Minister responsible for the
Canadian Wheat Board
(613) 957-2666
Robert Makichuk
Media Relations
Treasury Board of Canada Secretariat
(613) 957-2391
If there is a discrepancy between any printed version and the electronic
version of this news release, the electronic version will prevail.
TTY (Telecommunications device for the hearing impaired) - (613) 957-9090
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