Members > PlaNet > January 2010

A new year for the CAAT Plan

To start off the new year, here are some of the changes that will affect your pension and contributions in 2010.

Pensions increase by 0.4% in 2010

As of January 1, pensions increased due to indexation by 0.4%. A new inflation protection formula was used to calculate this year's increase. More information can be found in the Fall 2009 newsletter.

Increase in contributions

The final scheduled 1% contribution increase will be applied to the first pay period of 2010. A total of 3% in contribution increases for both members and colleges took place over the last three years. The new contribution rates for 2010 are:

Earnings to YBE	Earnings between YBE - YMPE	Earnings above YMPE
12.1%	10.3%	12.1%

YMPE

The Year's Maximum Pensionable Earnings (YMPE) is the maximum amount of earnings on which Canadians can contribute to the Canada Pension Plan (CPP). For 2010, the maximum is $47,200, an increase from the 2009 limit of $46,300.

YBE

The Year's Basic Exemption (YBE) is the amount below which contributions to the CPP are not made. For 2010 this amount remains unchanged at $3,500.

CPP Maximum Contributory Earnings

The CPP maximum contributory earnings for 2010 are $43,700 ($47,200 - $3,500). Canadians contribute to the CPP at a rate of 4.95% of their contributory earnings. For 2010 the maximum CPP contribution is $2,163.15 each for employees and employers. This is an increase from $2,118.60 in 2009.

2010 Canada Revenue Agency limits

The Canada Revenue Agency (CRA) places a limit on the annual amount that Canadians can contribute to their RRSPs each year (18% of the previous year's earnings, up to a maximum amount). For 2010, the maximum amount is $22,000, an increase from the 2009 limit of $21,000.

CRA also limits the amount of annual pension that can be earned by a member of a Defined Benefit pension plan each year. For 2010, the amount that can be earned is the lesser of:

2% of Highest Average Pensionable Earnings x years of Pensionable Service
or
$2,494 x years of Pensionable Service (an increase over the 2009 limit of $2,444.44)

January 2010