Ontario’s legislature has passed a bill to create the proposed provincial pension plan, the Ontario Retirement Pension Plan (ORPP), on Thursday, ahead of upcoming discussions between federal and provincial finance ministers on enhancing the Canada Pension Plan (CPP), which are scheduled to take place in Vancouver June 20-21.
The legislation establishes some of the central features of the ORPP, including participation requirements, contributions, benefit types and sustainability provisions. Further details will be set out in regulations, which are expected to be released this summer.
Under the act, enrolment in the ORPP will start in January 2017 and the collection of contributions will begin Jan. 1, 2018. It requires every eligible worker between 18 and 70 in Ontario to belong to the ORPP, or a comparable workplace pension plan, by 2020. Employees and employers will each contribute 1.9% of an employee’s annual earnings up to $90,000 (2017 dollars). Benefit payments would begin in 2022, starting at age 65.
The bill also establishes a compliance and enforcement framework to ensure that employers and plan members comply with the ORPP legislation, address issues of non-compliance (including fines for non-compliance) and to resolve disputes.
“The ORPP is the most significant improvement in retirement security since the introduction of the Canada Pension Plan in 1966,” says Mitzie Hunter, associate minister of finance, in a statement. “This legislation will expand workplace pension access to more than four million Ontario workers, meaning greater security and confidence in retirement for current and future generations.”
Despite the effort to create the ORPP, the provincial government maintains that it would prefer to reach an agreement with the other provinces and the feds on expanding the CPP.
“Our main objective is to intensively look at ways to meet the goals of the ORPP through an enhanced CPP framework, while preserving our ability to implement the ORPP, should that not be possible,” says Charles Sousa, Ontario’s finance minister, in a statement.
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