What You Need to Know About the Canada Pension Plan Changes and Your STRP Pension

December 17, 2021

In 2016, with savings rates on the decline, the federal government announced changes to the Canada Pension Plan that would result in working Canadians paying more into and getting more out of the CPP. The changes are to be phased in over a period of seven years – from 2019 to 2025.

What does this mean for your STRP pension?

The Saskatchewan Teachers’ Retirement Plan is calculated and paid independently of your CPP pension. That means you receive your monthly teacher pension from the STRP and your monthly CPP pension from the Canada Pension Plan.

However, the STRP is considered an integrated plan. This means that the benefit formula and contribution rates were designed to be integrated with the earnings covered under the CPP using stepped rates. The reason for this design was to offset your STRP pension by the amount of your CPP pension. These types of plans are common across Canada.

Beginning in 2024, the CPP is introducing an additional, higher earnings limit in order to increase the amount of earnings that are eligible for CPP benefits. With this change, the STRP formula will no longer align with the CPP benefit being earned. If the STRP formula doesn’t offset the CPP benefit actually being earned, then the original intent of an integrated stepped-rate formula will no longer make sense.

This issue will be brought to the Councillor Conference in 2022 for discussion, and then will return to the Annual Meeting of Council in 2023 for a final decision on whether any changes to the STRP pension formula are required.