Question

Each year, the Canada Revenue Agency determines (in regard to CPP)

a) Contribution limits for employees
b) Tax rates for businesses
c) Eligibility criteria for disability benefits
d) Pension plan options for retirees

Answer 1

The Canada Revenue Agency (CRA) is responsible for setting various regulations for the Canada Pension Plan (CPP), including contribution limits and pension options. Pensions have evolved from traditional defined benefits plans to now more common defined contribution plans, such as 401(k)s, which offer tax benefits, investment flexibility, and portability.

Step-by-step explanation:

The subject in question is the Canada Revenue Agency (CRA), specifically related to the Canada Pension Plan (CPP). Each year, the CRA is responsible for determining various aspects related to the CPP such as:

Contribution limits for employees,

Tax rates for businesses,

Eligibility criteria for disability benefits,

Pension plan options for retirees.

Transitioning from traditional defined benefits retirement plans, which are less common now, to defined contribution plans such as 401(k)s and 403(b)s has been significant. These defined contribution plans allow for regular contributions from both employers and employees, tax-deferred growth, and portability across jobs. This modern approach helps mitigate the impact of inflation for retirees, aligning with the shift to more individualized retirement savings structures.