The Ontario Retirement Pension Plan (ORPP) will help give companies a “recruitment advantage,” according to Ontario Premier Kathleen Wynne.
“One thing we’re hearing from the high technology economy is that a secure pension plan—one that builds on Canada’s expertise developed through the Canada Pension Plan or through the [Ontario] Teachers’ Pension Plan—will help to attract and retain the talent that they need to keep going,” she said in a speech at the Toronto Global Forum on Wednesday.
Read: What you need to know about the ORPP
She added that the ORPP will help secure Ontario’s economic future.
“We know that young people are not able to save enough for retirement,” Wynne said. “That’s an economic problem and it’s one I’m not going to let go on my watch.”
However, a number of business groups have warned that the ORPP will have unintended negative consequences for the economy.
A recent Ontario Chamber of Commerce survey found only 26% of employers in the province “believe they can shoulder the financial burden associated with the ORPP.”
Many Ontario employers also aren’t pleased because DB plans are considered comparable to the ORPP. Employers with DB plans won’t have to make ORPP contributions.
Capital accumulation plans, on the other hand, aren’t considered comparable. Employers without a comparable plan will have to contribute 1.9% of an employee’s annual earnings up to $90,000 to the ORPP. Employees will also have to contribute 1.9%.
The government is expected to make an announcement about the comparable plan issue later in the summer.
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