A employee benefits and pensions lawyer is generally considered to work in the following areas: structuring and establishment of pension and benefit plans; group insurance arrangements; taxation; fiduciary responsibilities; questions of surplus entitlement; the implications of planned acquisitions, mergers, reorganizations and spin-offs; and executive compensation arrangements such as offshore trusts compensation arrangements, equity compensation, executive terminations, retiring allowances and deferred income arrangements.
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Generally, employee benefits are those minimum entitlements of employees which are primarily required by the law and may be additionally supplemented by any agreement by the employer and the employee through a contract. Said contract may be agreed upon before or during the engagement of the employee.
Part of the employee benefits are pensions or a pension plan. A pension plan obligates the employer by law to regularly remit contributions to a pool of funds, so that an employee would become eligible for future payments after their retirement or as they reach the certain age set by law. This pension plan and its pool of funds are usually managed by the government or the state, which is also referred to as a social security system. There are also instances where private pension plans or funds are set up and managed by the employer.
A pensions lawyer, who may also be at the same time an employee benefits lawyer, works with employees and employers alike in various concerns regarding employee benefits and pension plans. As a pensions lawyer, they may help set up pension funds if the employer wishes to, or advise the employer in complying with regulations on remittance of pension taxes and mandatory contributions. They may also advise employees regarding the terms and conditions of pension plans and the benefits they may reap in the future.
In Canada, the state-run pension fund, or the social security system, is the Canada Pension Plan.
The Canada Pension Plan (CPP) is the social security system, or the retirement pension plan, for all Canadians which provides for a lifelong monthly pension payment to qualified Canadian retirees or disabled citizens. An exception from the CPP is the province of Quebec which has its own Quebec Pension Plan. In order to be qualified under the CPP, one must be at least 60 years old and must have at least one valid contribution.
As funds are pooled in a trust fund under the CPP, the board and its management in turn invest these money in various ways to ensure the longevity and sustainability of the CPP – for it to be able to pay off future retirees with the right amount and to extend the lifespan of the CPP itself.
The amount to be remitted to the CPP by the employee and the employer are generally “taxes” which are deducted from the employee’s income, in addition to employer’s share of the tax. This deduction starts when a Canadian reaches the age of 18 and starts to work, and will end by the age of 69 notwithstanding whether the employee is still working after the age of 60.
The payment scheme under the CPP is sometimes referred to as a “pay-as-you-go pension plan”, where a contributor may choose to do a lump-sum contribution, or a regularly deducted (monthly-basis) contribution. The specific computation for the amount to be remitted to the CPP may be provided by a pensions lawyer for accuracy and ensure compliance with it.
When an employee reaches the age of retirement, they must apply to be able to receive CPP payments since it is not automatic. The date indicated in an application would be the starting date of the pension payments to the retiree, but there are other options, such as when a retiree prefers to start receiving payments at the age 65, or as soon as the retiree becomes qualified. The said application must be filed at least six months before the preferred date of receiving the CPP payments. However, when an application has been denied, an appeal may be sent before the Canada Pension Appeals Board.
Applications for CPP payments, and appeals in case of the application’s denial, are best handled by a pensions lawyer, who are experienced in dealing with the CPP, the Pension Appeals Board, and its regulations.
The amount of pension to be received by the retiree would largely depend based on the number of years they contributed vis-à-vis the required minimum amounts. It would also depend on different factors, such as the starting age to receive the pension (since a retiree may start receiving his/her pension at the age 60 or as late as 70), and the average earnings of the total number of years the retiree has worked for.
Other than retirement pension, there are other CPP benefits that a retiree or an employee may use . These are best consulted with a pensions lawyer, or an employee benefits lawyer, to see if such benefits are available to a retiree’s or an employee’s case.
These other CPP benefits are:
Most minimum statutory employee benefits are found in the Canada Labour Code and are complemented by provincial or territorial labour laws. An in-house or outsourced employee benefits lawyer would typically ensure that these benefits are received by the employees, and complied with by the employers to prevent violating the Code and be penalized for it. Generally, all full-time employees are guaranteed these employee benefits. Part-time and probationary employees have a different set of benefits afforded to them.
The following are some of the minimum statutory employee benefits under the Canada Labour Code:
A pensions lawyer may help retirees and their employers determine whether such retiree is eligible under the CPP based on his/her employment history. Generally, the following conditions are set by the CPP for a retiree to get a full pension:
Under the retirement plan of the CPP, various factors may affect the actual and total maximum pension per month that a retiree may receive. But for retirement pension, for the year 2023, the maximum pension is $1,306.57. The other kinds of CPP benefits (e.g., post-retirement benefit, disability benefit, etc.) also has different maximum amounts.
Interested in knowing more about your pension and your employee benefits? Scroll down below to consult with any of the best pensions lawyers or employee benefits lawyers in Canada as ranked by Lexpert.