The Ontario government should delay implementation of its planned provincial pension plan to allow discussions on enhancing the Canada pension plan (CPP) to proceed, says the Association of Canadian Pension Management (ACPM).

In a recent letter to Ontario Premier Kathleen Wynne, the ACPM calls for a one-year delay in the implementation of the proposed Ontario retirement pension plan (ORPP). This would “allow the collaborative federal and provincial approach commenced last fall to continue, and will allow Ontario to assert its usual constructive and leading position in significant pan-Canadian public policy changes, such as potential CPP/QPP changes,” the ACPM says in the letter.

The association, which represents private pension plan sponsors, administrators and service providers, maintains that reforms to mandatory public plans “should occur on a national basis to ensure uniformity,” the ACPM letter says.

While the prospect of national reform has seemed “remote” in recent years, the ACPM letter says that since the new Trudeau government came to power last October, “these prospects have now changed substantially.” For instance, the letter notes that the new federal finance minister, Bill Morneau, has pledged to continue consultations with the provinces on possible enhancements to the existing CPP/QPP system over the coming year.

“If expansion of mandatory pension contribution programs is to be considered, we would be better served by a pan-Canadian approach that provides for a consistent application across Canada. Immediate implementation of the ORPP will materially detract from this objective, and may well foreclose prospects for any consensus-based national reforms,” the ACPM letter says.

“By proceeding with a 2017 implementation, the Ontario government is running a risk that Ontarians would be orphaned in a small-scale program. What’s more, Ontario could, uncharacteristically, frustrate the ability to identify any broader national consensus for CPP reform,” the letter adds.

The ACPM letter warns that merging a new provincial plan with the CPP in the future would involve numerous, significant difficulties. “There will be a variety of complexities relating to contribution levels, pensionable earnings definitions, benefit formulas, and differing tax treatments, among other potential issues. These complexities may well be insurmountable, especially if CPP reform on a national level were to identify targeted reforms,” it says.

In addition, the ACPM also encourages the government to expand the availability of Target Benefit Plans (TBPs) to Ontario. “Finalization of associated regulations for Target Benefit Plans for single employer plans would also foster an improved balance between pension plan sustainability, affordability and benefit security,” the ACPM letter says.