Calculation of Contribution Rates Regulations, 2007 (SOR/2008-50)

Regulations are current to 2018-10-03 and last amended on 2008-03-03. Previous Versions

Calculation of Contribution Rates Regulations, 2007

SOR/2008-50

CANADA PENSION PLAN

Registration 2008-02-28

Calculation of Contribution Rates Regulations, 2007

P.C. 2008-413 2008-02-28

Whereas, pursuant to subsection 115(1.3)Footnote a of the Canada Pension Plan, the lieutenant governor in council of each of at least two thirds of the included provinces, having in the aggregate not less than two thirds of the population of all of the included provinces, has signified the consent of that province to the annexed Calculation of Contribution Rates Regulations, 2007;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to paragraphs 101(1)(d.1)Footnote b and 115(1.1)(c)Footnote c of the Canada Pension Plan, hereby makes the annexed Calculation of Contribution Rates Regulations, 2007.

Interpretation

 The following definitions apply in these Regulations.

Act

Act means the Canada Pension Plan. (Loi)

contributory earnings

contributory earnings means the contributory salary and wages and the contributory self-employed earnings referred to in sections 12 and 13, respectively, of the Act. (gains cotisables)

increased or new benefits

increased or new benefits means the increased or new benefits referred to in paragraph 113.1(4)(d) of the Act. (accroissement des prestations)

payments

payments means the payments charged to the Canada Pension Plan Account under subsection 108(3) of the Act excluding any payments in respect of any increased or new benefits that resulted in a non-zero contribution rate under section 3. (paiement)

review period

review period means any three-year period for which the Chief Actuary prepares a report set out in subsection 115(1) of the Act. (période d’examen)

Calculation of Contribution Rate

 For the purposes of subparagraph 115(1.1)(c)(i) of the Act, the contribution rate is the one that is the smallest multiple of 0.001 percentage points and that results in a projected ratio of assets to expenditures for the 60th year after the review period that is not lower than the projected ratio of assets to expenditures for the 10th year after the review period which ratios are determined in accordance with the formula

(A + B – C) / D

where

A
is the projected balance in the Canada Pension Plan Account on December 31 of that year;
B
is the projected assets of the Investment Board on December 31 of that year;
C
is the projected assets on December 31 of that year in respect of any increased or new benefits that resulted in a non-zero contribution rate calculated under section 3; and
D
is the projected payments for the following year.
  •  (1) For the purposes of subparagraph 115(1.1)(c)(ii) of the Act, the contribution rate with respect to any increased or new benefits is equal to the sum of the permanent increase in the contribution rate calculated in accordance with subsection (2) and the temporary increase in the contribution rate calculated in accordance with subsection (3).

  • (2) The permanent increase in the contribution rate is calculated, in respect of contributory earnings for the year that, and the years after, the increased or new benefits come into effect, as the ratio of the present value of the projected extra costs related to the increased or new benefits in respect of those contributory earnings to the present value of those contributory earnings.

  • (3) The temporary increase in the contribution rate for a period not exceeding 15 years is calculated, in respect of contributory earnings for the years before the increased or new benefits come into effect, as the ratio of the present value of the projected extra costs related to the increased or new benefits in respect of those contributory earnings to the present value of contributory earnings for the same period as the temporary increase in the contribution rate.

  • (4) The present values referred to in this section shall be calculated as of the day on which the increased or new benefits come into effect.

  • (5) If the contribution rate calculated in accordance with subsection (1) is less than 0.02 percentage points, the contribution rate shall be deemed to equal zero.

Rounding of Amounts

 If a contribution rate determined under section 2 and subsection 3(1) is not a multiple of 0.01 percentage points, it shall be rounded to the nearest multiple of 0.01 or, if the amount is equidistant from the two multiples, to the higher multiple.

Repeals

 [Repeal]

 [Repeal]

Coming into Force

Footnote * These Regulations come into force on the day on which section 14 of An Act to Amend the Canada Pension Plan and the Old Age Security Act, chapter 11 of the Statutes of Canada, 2007, comes into force.

 
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