The Ontario government has released a discussion paper, weighing the alternatives for expanding the Canada Pension Plan, among other changes to the pension system.

Published Friday, the paper seeks input on possible ways to expand the CPP, a policy that the government supports. “We must build on the strengths of the CPP through a modest expansion of benefits,” it says, adding that this enhancement will be affordable if contribution rates are phased in gradually.

Additionally, it notes that Ontario’s employment pension laws need updating, and that the province is moving to modernize and strengthen pension legislation. It adds that Ontario needs more pension innovation.

“Current tax and pension rules state that pension plans can only be offered where an employment relationship exists. This limits the retirement savings options available to the self-employed and those who work for small businesses. By changing these laws, we can expand the range of institutions that can set up pension plans, and the range of people who can access them. Large pools of capital could reduce costs and help improve investment returns,” the discussion paper says.

“Much remains to be decided about how to pursue each of these steps. What kind of ‘modest’ CPP increase works best? How can we best use pension innovation to provide more efficient, lower-cost savings options? How should we use these tools to make it easier, more affordable, and more secure to prepare for retirement?” the paper asks.

It is seeking comment by the end of November, in time for the next finance ministers’ meeting on December 20.

IE