■■ A five-year contribution rate phase-in of an additional
1 per cent up to the Yearly Maximum Pensionable Earnings
(YMPE) for both employees and employers, followed by
■■ A two-year phase-in of an additional 4 per cent contribution
on a new upper earnings limit for both employees and
employers
■■ Increase the Working Income Tax Benefit to help
low-income earners
■■ Provide a tax deduction instead of a tax credit for employee
contributions associated with the enhanced portion of CPP
HOW EMPLOYERS SHOULD PREPARE
Employers should anticipate that such changes might affect or-ganizational
policies, staff responsibilities and remuneration
planning. They will also have to ensure compliance within payroll
systems, human resources policies, employee handbooks and pen-sion
documents.
The first step is to review the organization’s current payroll, re-tirement
and benefit programs to ensure the required changes can
be made efficiently. Organizations should enable their HR, pay-roll
and accounting staff to plan for the changes and assess how
the CPP enhancement will affect the payroll operations, employer
sponsored pension, retirement and/or savings plans and bene-fits.
Only by assessing where the organization’s offerings currently
stand, how they may be impacted and what potential efficiencies
can be realized can these staff manage cross-functional planning of
future offerings for staff.
For the many HR professionals who have payroll oversight, be
mindful that CPP enhancement will require mandatory ongo-ing
payroll system changes in the coming years. Implementation
should be planned and discussed well in advance of the actual
deadline dates. While the proposed gradual phase-in will provide
additional time for organizations to assess for the full financial
impact, the CPA recommends employers begin any program ad-justments
a minimum of 18 months in advance. You may need to
consider providing an additional buffer depending on the com-plexity
of your employee scenarios (e.g., employees transferring
between jurisdictions, including Quebec). Human resources and
payroll professionals are the best people in an organization to work
through such employment scenarios in advance of implementation.
The CPA is in ongoing discussions with the Canada Revenue
Agency (CRA) and Revenu Québec for Quebec Pension Plan
changes to promote effective and efficient administration of these
more complex CPP scenarios.
Finally, organizations should ensure that ongoing employ-ee
communications address retirement questions that staff may
have regarding these CPP changes. When making any changes
to employee benefits offerings, organizations should provide clear
communication to everyone affected and be available to answer
ongoing queries. HR and payroll should draft fact sheets includ-ing
typical questions and answers that you anticipate arising from
the CPP changes. Employees will want to know how the changes
will impact them, their pay, pay statements, tax returns and their
retirement savings.
Ultimately, careful planning and ongoing education will be
crucial for both employees and employers in the wake of CPP
enhancements. Start planning now and engage the resources re-quired
to ensure that these mandatory CPP changes are well
planned and implemented for employees. n
Patrick Culhane, B.Comm., CAE, FCPA, FCMA, is the president
and CEO of the Canadian Payroll Association.
benefits
FOR THE MANY HR
PROFESSIONALS WHO HAVE
PAYROLL OVERSIGHT, BE MINDFUL
THAT CPP ENHANCEMENT WILL
REQUIRE MANDATORY ONGOING
PAYROLL SYSTEM CHANGES
IN THE COMING YEARS.
Luca Santilli/Shutterstock.com
36 ❚ APRIL 2017 ❚ HR PROFESSIONAL
