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Local Business

Brainstorming Changes to the Canada Pension Plan

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Currently, employees have to pay roughly 5% of their income up to around $50,000 to the Canada Pension Plan. Their employers must match this amount. In simple terms, this is up to $2,500 per year, per employee, for both the employee and employer.

There are changes beginning in 2019 to gradually raise this amount to around 6% from around 5% while indexing the maximum pensionable amount. By 2024, the amount you pay CPP on is estimated to be over $66,000, and the rate around 6%. This is around $4,000 paid by the employee and around $4,000 paid by the employer.

There is then going to be an additional amount of another 4% for people earning more than this amount on the next $10,000 of earnings… ($400 per person)… but let’s just focus on the under $66,000 crowd for now.

The current system forces the employer and employee to contribute to a plan that they have no control over, and the government decides the rules, the investments, and the amount you get back when you can collect. If you die, your spouse may get a spousal benefit, but if you both pass away, there is nothing left behind to the next generation, siblings, charity, etc.

So let’s brainstorm.

What if, instead of a 5%… soon to be 6%… mandatory CPP contribution by employees and employers, we made it a mandatory 6% from both sides to an individual employee Locked-in Retirement Account or LIRA that the employee-owned (not the government nor the employer).

Now I’m not referring to the current technical definition of a LIRA necessarily, as I’m not an expert on retirement investment products. However, I am referring to the possibility of keeping your pension for your family, secured for later use, rather than letting the government dictate and take it from your family after death.

This “LIRA” could have the same characteristics of the CPP in that you can’t touch it until 60… and you must take it out or convert to a Registered Retirement Income Fund (RRIF) by 71. This will provide more control over the individual receiving the amount while locking it in for retirement.
It would also allow for the money to be transferred to a spouse, children, estate, or make a legacy donation upon death, rather than get eaten up by bureaucracy.

Many small business owners can’t afford to pay more benefits than what the government is already mandating, and that’s fine. I’m not saying increase or decrease the amount. I’m saying change the beneficiary.

As an employer myself, I want to provide for MY employees and their families. Why should their loved ones suffer financially because of a premature death of the parents? The money the parents paid into the CPP all their life is now being used to fund someone else’s retirement.

The CPP rewards longevity.

You would be better off to hook yourself up to a machine in perpetuity just to keep you alive and the cheques coming into your bank account for your descendants, than to die of natural causes.

However, families that need the money the most, need it usually because of a result of a premature death of the main income earner. If your children are adults and out of school, then there is nothing left behind other than a nominal maximum “death benefit” of up to $2,500 which we all know won’t even be enough to cover the funeral costs, probate fees, and legal costs.

With this idea, the cost is still the same for the employer and employee just like the CPP. The key difference is that in the event of death, the remaining amount can be transferred to whomever the employee designated as the beneficiary, rather than losing it all to the government. This plan would preserve the legacy of the individual that passed.

Do you like this idea? Or not?

So tell me what you think. Is it time we thought outside the pine box casket?

Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html

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food and dining

One Eleven Grill shows off new renovations and some new menu creations

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One of Red Deer’s favourite restaurants has put some major effort into updating their space and creating some new menu items. One Eleven Grill opened its doors in 2011 with as a fresh and innovative entry into the local dining scene.

They’ve recently completed renovations and spent considerable time and effort developing some tasty new menu items. Watch the video above to get an idea of what you’re in store for next time you head down to one of the city’s finest restaurants.

About One Eleven Grill: An inviting and stylish restaurant tucked into the heart of Red Deer just waiting for you to discover or rediscover.

Opened on the first day of November in 2011, One Eleven has been thoughtfully and skillfully preparing delicious food and drinks for Central Alberta for years.

Our passion is STEAK! We are committed to quality, serving only the very best locally-owned, grass fed Alberta Triple AAA Beef in both classic and unique cuts.

Our warm, inviting ambiance is the perfect backdrop for everything from a romantic evening, a gathering with friends and family and even a quiet business lunch during the week. We even feature live jazz every Friday and Saturday. Add in one of the best selections of wine in the region, and One Eleven will set the perfect tone for your weekend.

At One Eleven we’re committed to your total satisfaction and we celebrate the people and food of Red Deer and Central Alberta every day.

For amazing food, great music and good times with family and friends, keep One Eleven in mind.

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Local Business

Red Deer Chamber of Commerce accepting nominations for Business of the Year

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Now Accepting Nominations for the 2019 Business of the Year Awards

The Business of the Year Awards are organized by the Red Deer & District Chamber of Commerce and held annually in conjunction with Small Business Week.

The Business Awards are presented, in five categories, to exceptional businesses within the Red Deer area. All companies, Chamber members and non-members, are eligible for nomination for an award in their respective category.

“We have organizations doing extraordinary work in our community and far too often their accomplishments and charitable activities go unrecognized. Our entrepreneurs and businesses are incredibly humble so it gives of great pleasure to be able to recognize them” said Rick More, CEO of the Red Deer & District Chamber of Commerce.

The Red Deer & District Chamber of Commerce is now accepting nominations for the Business of the Year Awards in the following categories: 1-10 employees, 11-20 employees, 21+ employees, Young Entrepreneur and Non-Profit. Nominations can be submitted from the online nominations form. The deadline for application submission is July 26, 2019 at 4:30pm.

The Business of the Year Awards will be held on October 16, 2019 at the RDC Arts Centre & Foyer.

The Red Deer & District Chamber of Commerce is a collaborative leader in building a vibrant community and fosters an environment where businesses can lead, be innovative, sustainable, and grow.

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