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Hamilton agrees the expanded CPP will especially benefit those lacking DB pensions: “They won’t need to worry about high fees and difficult investment decisions. They will receive larger pensions for life, which will diminish their exposure to longevity risk.”

But the expansion is a mixed blessing for employers, he cautions: “Private-sector employers will probably pay lower wages, but given the small contribution rate and lengthy phase-in period, this won’t be noticeable. Public-sector employers will probably not reduce wages, choosing instead to punt the added cost to taxpayers, as is their practice.”

The phase-in occurs in two steps. The first, between 2019 and 2023, sees a rise in contribution rates. The second, in 2024 and 2025, addresses higher earnings ceilings. The second ceiling will be created in 2024 and will be 7 per cent in excess of the regular YMPE, Hector says. Then in 2025, the second ceiling will rise another 7 per cent to a total 14 per cent: with contributions split evenly between employees and employers.

CPP enhancement may magnify the impact of perennial decisions like taking CPP early at 60 or delaying till 70 for higher payouts. Higher CPP income may impact Old Age Security (OAS) clawback zones and pension income splitting. Matthew Ardrey, wealth advisor with Toronto-based TriDelta Financial, says low-income persons obliged to contribute to the enhanced CPP will have less take-home pay, while in retirement, larger CPP benefits could reduce what they receive from the Guaranteed Income Supplement (GIS). GIS is tax-free while CPP is taxable so Ardrey observes low-income people could be worse off both at the contribution and the receiving end of the enhanced CPP.

Even so, the combination of an enhanced CPP and the decade-old Tax-free Savings Accounts (TFSAs) is something most Boomers wish they had when they were young.

Jonathan Chevreau is founder of the Financial Independence Hub, author of Findependence Day and co-author of Victory Lap Retirement. He can be reached at jonathan@findependencehub.com