An enhancement of the Canada Pension Plan to increase retirement income for working Canadians and their families has also meant increased contributions from employees and employers. The changes are not a separate benefit, but instead act as a top-up to the base Canada Pension Plan.

Starting this year, the federal government introduced a second, higher limit to the Yearly Maximum Pensionable Earnings, allowing the plan to protect a higher portion of earnings. Like the original earnings limit, the new limit will increase each year to reflect wage growth.

The second phase of CPP enhancements, commonly referred to as “CPP2,” introduces a second level of contributions applied to the additional tier of eligible income.

“Some campus community faculty and staff are now seeing these additional CPP2 deductions on their pay stubs and we have received a few questions about this new mandatory deduction,” says Andrew Kuntz, manager of university budgets in the Financial Services Department.

He encourages those interested in learning more to visit the government’s website explaining the CPP enhancement.