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Ontario Retirement Pension Plan Act, 2014

Archived Backgrounder

Ontario Retirement Pension Plan Act, 2014

Ministry of Finance

Ontario is moving forward on its commitment to build a strong, secure retirement income system. The introduction of the Ontario Retirement Pension Plan Act, 2014 is a step forward on this priority. If passed, this act would commit the government to establishing the plan by Jan. 1, 2017. 

The Current System Isn't Going Far Enough

Canada and Ontario have a strong retirement income system, built on the Canada Pension Plan (CPP), Old Age Security, the Guaranteed Income Supplement and the Ontario Guaranteed Annual Income System. However, these programs do not provide enough income replacement for many Ontario workers to help ensure they are able to maintain a similar standard of living in their retirement.

  • Many Ontario workers face a potential retirement income gap because of the limited benefits provided by the CPP and OAS
  • To fill this gap, workers must rely on other sources of retirement income, such as registered retirement savings plans (RRSPs)
  • However, a significant number of today's workers will be stretched to save enough to ensure they can maintain their standard of living throughout their retirement years

The Ontario Retirement Pension Plan

The government is committed to building a strong and secure retirement income system, and is taking a leadership role in addressing this pressing issue by establishing the ORPP.

The ORPP would be the first of its kind in Canada, building on key features of the CPP.

The pension plan would:

  • Offer a predictable stream of income in retirement for life, and index benefits to inflation, similar to the CPP's retirement benefit. Predictability helps workers plan for their retirement, and indexation ensures that the value of the benefit does not erode over time.
  • Require contributions to be shared equally between employers and employees, not exceeding 1.9 per cent each on earnings up to a maximum annual threshold of $90,000 (in 2014 dollars). Employer contributions help bolster individuals' savings for retirement.
  • Aim to replace 15 per cent of an individual's earnings up to a maximum annual earnings threshold. Contributions would not be required below a low-earnings threshold, in order to reduce the impact on lower-income workers.
  • Require benefits to be earned as contributions are made. This ensures that the system is fair and younger generations are not burdened with additional costs associated with older workers' benefits.
  • Offer portability, giving younger workers who are expected to change employers multiple times in their working lives, a single place to accumulate savings of the course of their careers.
  • Be administered by an arm's length entity with a strong governance structure and investment strategy to ensure efficient management, accountability, transparency and fairness.

Feedback and Consultations

For several weeks, the Associate Minister of Finance, the Honourable Mitzie Hunter, has been meeting with a variety of stakeholders - meeting with businesses, labour, organizations, associations, as well as individuals, families and communities across the province - to ensure that the ORPP properly balances retirement income security with impact on business.

Formal consultations will start in early 2015 and will focus on the key design issues of the ORPP.

Collection and Disclosure of Personal Information

In order to obtain the information necessary for the purpose of establishing the ORPP, the legislation would provide the government with the ability to collect certain personal employee information from employers and would authorize the disclosure of such information to the Minister of Finance.  If the legislation is enacted, the use, storage and disposal of the personal information would be governed by the Freedom of Information and Protection of Privacy Act and appropriate measures would be taken by the Ministry to protect the security of that information. 

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