The Ontario Retirement Pension Plan (ORPP) is needed because Ontarians’ workplace pension plan coverage is low, and they aren’t saving enough, according to Associate Minister of Finance Mitzie Hunter.

In one 2012 report, only 34% of Ontario workers have a workplace pension plan, and in the private sector it’s only 28%, she said at the Canadian Pension & Benefits Institute’s event on the ORPP in Toronto on Wednesday.

There’s the issue of people relying on themselves to save, Hunter noted. Only 16% of Ontarians not in a workplace plan contribute to an individual RRSP.

Read: What DC plan sponsors need to know about the ORPP

With Canadians’ lifespans increasing and a growing number of employees not able to retire at 65, there will be a large number of people living below their standard of living, she added.

And small and medium-size employers face the challenges of cost and administrative difficulties of sponsoring a plan.

“That’s not good for people, businesses and Ontario’s economy,” Hunter said.

She herself has been involved in many consultations across the province, hearing from small and large businesses, from all economic sectors and from current employees to the self-employed.

“Everyone has an opinion, but there is a common thread, and that’s the concern for retirement and security,” she said.

“When we hear people’s stories and talk to them about their futures, it solidifies the why,” Hunter explained, adding that retirement security is not just a financial, economic or actuarial issue. “It’s about people, something everyone is thinking about.”

“The ORPP is one of the most significant enhancements and changes that we’ve seen to the public pension system,” she said.

Currently, Bill 56, An Act to require the establishment of the Ontario Retirement Pension Plan, is in its second reading, Hunter said, and is looking at three major issues for the ORPP:

  • deciding what constitutes a comparable plan to the ORPP so some employers will be exempt from offering it;
  • determining what the minimum earnings threshold for employees should be; and
  • the proper treatment for those Ontarians who are self-employed.

The government is aiming to have the ORPP in place Jan. 1, 2017.

Looking for more related articles? Click here for additional stories on the ORPP.


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