Stop Contributing to CPP?

For employees between the ages of 65 and 70 years old, the decision of whether to continue to contribute to CPP and thereby increase their CPP benefits, or to instead opt out and retain the annual premium needs to be made.

Form CPT30, Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election for 2014 was released on September 26, 2014. This now requires affected employees who are also collecting CPP retirement benefits to make a decision. Here are the options:

1. Do Nothing. By doing nothing, one of two things will happen.
   1. Any prior election made with the current employer will remain in effect.
   2. If there is no prior election, CPP premiums will be deducted from their pay and they will receive the increased benefit the following year.
2. Opt-Out. Employees ages 65 to 70 who are collecting CPP benefits have the option to opt-out of further premiums by completing and filing form CPT30. One copy of the election is filed with the employer and another copy is forwarded to the Winnipeg Tax Centre, Specialty services Section who handles all CPT30 elections for Canada.
    
3. Revoke a Previous Election. Employees 65 to 70 who are collecting CPP benefits and previously chose to opt out, have the option to revoke their prior election and begin to remit CPP premiums again. This will result in a higher CPP benefit beginning in the following year.

Regardless of whether the employee is opting in or revoking a prior election, changes are effective at the first of the month following the employee providing form CPT30 to their employer.

Can’t decide which is the best overall advantage? Try the Knowledge Bureau’s CPP Income Calculator to help determine your best option.