Calculation of Contribution Rates Regulations, 2021 — 5
Additional contribution rates — increased or new benefits 5 (1) For the purpose of subparagraphs 115(1.1)(d)(ii) and (e)(ii) of the Act, the first additional contribution rate and the second additional contribution rate with respect to any increased or new benefits are equal, respectively, to the permanent increase in the first additional contribution rate plus, if applicable, the temporary increase in that rate and to the permanent increase in the second additional contribution rate plus, if applicable, the temporary increase in that rate. Permanent increases (2) The permanent increases in the first additional contribution rate and the second additional contribution rate are equal, respectively, to the difference obtained by subtracting the first additional contribution rate calculated under section 4 from the first additional contribution rate that would be calculated under that section if the following variations applied, and to the difference obtained by subtracting the second additional contribution rate calculated under section 4 from the second additional contribution rate that would be calculated under that section if those variations applied: (a) the present value of projected expenditures and contributions and the projected value of assets referred to in paragraph 4 (1)(b) are to be determined without taking into account any increased or new benefits that result in a contribution rate increase under subsections (3) and (4); (b) the description of B in paragraph 4 (1)(c) is limited to the projected value of assets of the additional Canada Pension Plan in respect of any increased or new benefits that result in a contribution rate increase under subsections (3) and (4); and (c) the description of D in paragraph 4 (1)(c) is limited to the projected amounts charged to the Additional Canada Pension Plan Account under subsection 108.2(3) of the Act in respect of any increased or new benefits that result in a contribution rate increase under subsections (3) and (4). Temporary increases (3) Subject to subsection (4), the temporary increases in the first additional contribution rate and the second additional contribution rate apply for a number of years that is consistent with common actuarial practice and are the smallest multiples of 0.0001 percentage points that result in (a) the temporary increase in the second additional contribution rate being equal to the temporary increase in the first additional contribution rate multiplied by the additional contribution rate ratio; and (b) the following formula being satisfied: A + B = C where A is the projected value of all assets of the additional Canada Pension Plan in respect of the increased or new benefits that are based on the contributory earnings for each year before the year in which the increased or new benefits come into effect; B is the present value of contributions to be made as a result of the temporary increases in the first additional contribution rate and the second additional contribution rate; and C is the present value of the projected extra costs of the increased or new benefits that are based on the contributory earnings for each year before the year in which the increased or new benefits come into effect. De minimis (4) There is no temporary increase in the first additional contribution rate or the second additional contribution rate if the increase in the first additional contribution rate calculated under subsection (3) is less than 0.02 percentage points. Exception — rates for 2022 and 2023 (5) Despite subsection (1), the first additional contribution rate for 2022 is equal to the first additional contribution rate calculated for 2024 multiplied by 0.75, the first additional contribution rate for 2023 is equal to the first additional contribution rate calculated for 2024 and the second additional contribution rate for 2022 and 2023 is equal to zero.