November 30 is the last day employees aged 71 are eligible to contribute to the plan
Do you have employees turning 71 this year? There are a few things to consider.
Under the Income Tax Act and its regulations, an employee must start receiving their pension no later than the end of the year in which they turn 71. This means your 71-year-old employees must start collecting their pension no later than December 1 of the same year. It’s also your responsibility to ensure you don’t collect contributions from these employees after November 30.
Your employees aged 71 can keep working without interruption, but you must stop collecting pension contributions from them. Submit final salary, service and contributions up to November 30 to the plan on or shortly after November 30.
For example: If you have an employee born in 1945 who will turn 71 in 2016, you must stop collecting contributions for this employee effective November 30, 2016, even if they turn 71 in December. Your Payroll Report must not include service, salary or contributions beyond November 30.
We send your employees a pension estimate and retirement application package in the year they turn 71. Please ensure we have their current contact information.