Expanding the Canada Pension Plan would be the best way to fend off the retirement crisis, presenters at the Standing Committee on Social Policy hearings on the Ontario Retirement Pension Plan said on Monday.
But until two thirds of the provinces representing two thirds of the population agree to support that expansion, many agree the ORPP is “a very good second best,” as Hugh Mackenzie, principal at consultancy Hugh Mackenzie and Associates, told the committee at Queen’s Park.
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Representatives of several unions argued the ORPP should be universal and nationwide. Mandatory participation would eliminate “confusion – real or feigned – within the business community” about who must comply, said Canadian Union of Public Employees Ontario president Fred Hahn. He also pointed out the province shouldn’t count on employees to report companies that violate the law, since many may fear reprisals.
Speakers also said a non-universal ORPP would create a “patchwork” of pension coverage. Those switching between private pension plans and the ORPP several times throughout their careers would have to deal with the resulting administrative tangle, as well as potentially paying multiple administrative fees.
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Several presenters also disagreed with the exemption of comparable defined contribution plans. “There will be a cost to review and to enforce the comparable plan exemption; there is also the potential for Ontarians to lose their entitlement to ORPP benefits if the comparable plan is not properly administered,” said Katha Fortier, Ontario regional director at Unifor.
The exemptions are the government “tipping a hat to insurance providers” that want to maintain their profits, said Jo-Ann Hannah, pension and benefits director at Unifor.
Mackenzie pointed out employers’ contributions to defined contribution plans would be reduced by their ORPP contributions. He also argued the government should amend the Pensions and Benefits Act to increase ORPP portability: employees leaving a company before retirement could then move the amount they would have earned if they had been participating in the ORPP from their workplace plan to their private plan.
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Members of the Canadian Institute of Actuaries argued the ORPP should be targeted at middle-income Canadians, who are at the highest risk of insufficient funds during retirement. Higher earners are likely to be protected by savings and workplace pension plans, they added. Moreover, lower-income Canadians may not have the funds to contribute for retirement, and lower incomes are already covered by current public pension rates.
Other presenters included the United Steelworkers, the Canadian Centre for Policy Alternatives, the Canadian Association for Retired Persons, the Society of Energy Professionals and the Healthcare of Ontario Pension Plan.
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