The underfunding the QPP saw during its early years offers lessons for the upcoming Ontario Retirement Pension Plan (ORPP)—as well as for a potentially expanded version of the CPP, argues a new C.D. Howe Institute report.
The report says federal and Ontario lawmakers should avoid the inter-generational inequity created by the QPP, where one generation of participants gets more benefits than it contributed to the plan.
The report makes several recommendations, including the creation of automatic adjustment mechanisms. “Adjustments should be triggered once certain levels of funding ratios are attained,” the study says. “Certain parameters of the proposed [ORPP], such as retirement benefits, earlier or later commencement of retirement benefits and indexation, should be flexible and prone to automatic mechanisms if underfunding or returns discrepancies are expected.”