Canadians Now Allowed to Save More for Retirement

February 19, 2003 ( - In an effort to get Canadians to better plan for retirement, Canadian government officials have announced workers will be allowed to sock away more than they can now in a retirement account.

Officials said they would also try to cut the amount workers and companies pay into the employment insurance fund, Reuters reported.

In his new budget, Finance Minister John Manley said the maximum amount Canadians can put in their registered retirement savings plans will be ramped up to CDN$14,500 this year, CDN$15,500 next year, CDN$16,500 the following year and then to CDN$18,000 for 2006. The current limit is CDN$13,500.

Canadians, according to budget documents, have CDN$1 trillion invested in the various pension plans, which are encouraged by the government to supplement the government-run Canada Pension Plan. Canada also has the Old Age Security plan.

In its 10th reduction since 1994, Ottawa will reduce a worker’s payment into the Employment Insurance fund to CDN$1.98 per CDN$100 of insurable earnings in 2004 from CDN$2.10 per CDN$100 of insurable earnings this year.