COMMERCE 4FL3 Chapter Notes - Chapter 13: Pension
6 Jun 2020
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Chapter 13 - saving for distant goals: retirement and. Pay as you go - government system - replacement ratio: every time you get paid gov takes 4. 95% and that money is used to pay current retiree"s, downside: demographic risk. If canada files for bankruptcy, the money is gone: as long as you have enough people paying, you are fine. If there is a surge of people retiring then people paying (working) there will be a shortfall (peter and paul example) The income replacement rate begins increasing towards one-third of earnings starting in. 2019, but the full effect of the change in benefits and contributions won"t be felt for another 40 years. Ympe in 2017= ,300 ympe in 2019= ,400: both employee and employer each contribute 4. 95% of wages up to some ympe. For the self-employed, you contribute both the employer and employee portions: the funds are managed by a cpp board.
