2020 Maximum Earnings & Contributions

November 14th, 2019

The Income Tax Act limits how much pension an individual may earn in a given year and limits a person’s total pension contributions to 9% or their annual income.

 

For 2020, the MEBP maximum pensionable earnings are $169,286.00 and the maximum employee pension plan contributions are $15,235.74.

 

Once the member’s pensionable earnings reach the $169,286.00, pension contribution to the Municipal Employees Pension Plan must be stopped.

 

Because the MEPP pension contribution is greater than 9% after a member reaches the Canada Pension Plan Maximum earnings ($58,700 in 2020), contribution deductions must be adjusted as follows:

 

For members who participate in the Disability Income Plan, pension contributions must be deducted as follows:

 

$0.00

-

$58,700

@ 8.3% =

$4,872.10

$58,700.01

-

$140,880

@ 9.5% =

$7,807.10

$140,880.01

-

$169,286

@ 9%    =

$2,556.54

 

 

MAXIMUM CONTRIBUTION

$15,235.74

 

 

For members who do NOT participate in the Disability Income Plan, pension contributions must be deducted as follows:

 

$0.00

-

$58,700

@ 8.4% =

$4,930.80

$58,700.01

-

$117,400

@ 9.6% =

$5,635.20

$117,400.01

-

$169,286

@ 9%    =

$4,669.74

 

 

MAXIMUM CONTRIBUTION

$15,235.74