Sixty-six percent of Ontario companies may consider eliminating their existing DC or group registered retirement savings plan if the Ontario Retirement Pension Plan (ORPP) is introduced, according to a survey.

The Canadian Life and Health Insurance Association (CLHIA) survey, conducted by Environics Research, also finds 78% of companies are likely to reduce contributions to their workplace retirement plan.

“Environics’ survey shows that the Ontario government’s proposal threatens the viability of existing plans and could negatively impact the retirement savings of millions of Ontario workers,” says CLHIA president and CEO Frank Swedlove.

Read: CLHIA pans Ontario’s stance on DC plans

The CLHIA has previously said it isn’t pleased with the Ontario government’s stance on DC plans.

An ORPP consultation paper released last year said restricting the definition of “comparable” plan to DB and target benefit multi-employer pension plans would allow the ORPP to be available in a broader range of workplaces.

The CLHIA also notes a McKinsey report—released earlier this week—shows that while most Canadians are on track to save enough for retirement, the problem of inadequate savings is limited largely to mid- to high-income households that don’t have an employer plan or don’t make sufficient contributions to their plans.

Read: Most Canadians prepared for retirement

Coincidentally, the CLHIA released the survey results the day before comments are due on the ORPP consultation paper.

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Not surprising. The same behaviours will be observed- this time on the part of sponsors-as would be the case if members were offered a DB on an optional equivalent contrib. basis in place of their current DC.

The new Ontario plan crystallizes the relative cost/value for employers. Higher cost in exchange for benefit certainty and administrative relief on the one hand; benefit uncertainty, high administrative burden and moderate cost on the other.

Benefit risk, reputational risk and administrative cost outweigh DC notional accrual advantages for many employers. Dropping CAPs, in other words, would not be a sign of protest, but a sound business decision in the face of what is admittedly a less than ideal alternative. The ones that keep their DC plans would no doubt do so because they have figured out how to build broad member support for them. That they are in the minority is perhaps a lesson in itself.

Thursday, February 12 at 2:35 pm | Reply

Neil Craig:

Well that survey is certainly consistent with the views of my DC clients. Not to mention the costs that will fall on the taxpayers or plan members to set up an entirely new investment and recordkeeping infrastructure. If the UK is any indication the cost will be in the 100’s of millions of dollars just to get it going. This could be ultimate result of the ” I will take my pail and shovel and go build my own sandbox” politics practiced by the provincial government.

Thursday, February 12 at 2:53 pm | Reply

Derek Fudge:

This survey is suspect coming from an association representing the very financial services sector that in the business of selling retirement savings products with high fees associated with them.

Thursday, February 12 at 3:08 pm | Reply


So most Canadians are saving enough for retirement and we don’t need intervention. Then let’s not solve the unemployment problems when they occur if less than 50 % are unemployed. Most Canadian Workers who are married will be divorced at least once by the time they retire and I have yet to see any long term retirement planning for that eventuality .
That statement is not an ample defense of non intervention but a curse of narrow single minded planning.

Tuesday, February 17 at 1:04 pm | Reply

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