The Ontario Registered Pension Plan Administration Corp. will begin an extensive education campaign about the ORPP for employers this summer and a verification process for all companies enrolling in it as of Jan. 1, 2017, will begin in the fall.
Marc Sharrett, director, strategic stakeholder relations, ORPP Implementation Secretariat at the Ministry of Finance, provided the update to a roomful of benefits providers at the Benefits Alliance Group’s annual conference in Toronto on Wednesday.
“It’s really critical that employers and employees need to know now what they need to do and what they will get from this sooner rather than later,” he said. “Otherwise — and the government takes this very seriously — you put employers in a position in which they will not have a reasonable amount of time.”
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The verification process will include conversations between the ORPP administration corporation and employers to determine where they fall in the plan’s phased-in approach. “Two things will determine where an employer ends up,” said Sharrett.
The first is how many employees an employer has, which will be based on Ontario employees where a T4 has been issued in the 2015 calendar year. If an employer has 50 or more employees, it will be in the first and second wave of enrolments on Jan. 1, 2018. As small business with less than 50 employees will be in the third wave that begins Jan. 1, 2019.
The second criteria is whether or not an employer had a registered pension plan on Aug. 11, 2015. “If you did, you will come in on Jan. 1, 2020,” said Sharrett. The government determined this criteria because it recognized that many Ontario employers do provide a registered pension plan to employees.
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“It doesn’t matter how many employers are covered by that, it doesn’t matter it it’s comparable or not,” said Sharrett. “You will have additional time to decide whether you’ll alter your plan to be comparable or enrol employees in the ORPP.”
Another element of the phased-in approach is the fact the government will phase in the rates for employers that don’t have a registered pension plan. With the exception of the fourth wave, the contributions will begin at 0.8 per cent and increase to 1.6 per cent and then the full 1.9 per cent. “Those employers that have a registered pension plan will come in right at the 1.9 per cent,” said Sharrett.
The Ontario government introduced a new bill for the ORPP on April 14. Despite all of the information now available, many delegates at the conference are still pushing back against the ORPP.
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“You’ve created a bit of a storm, and we’d rather this went away,” said one delegate at the event.
The government has always said that Canada Pension Plan enhancement is the first choice but it’s not going to wait to address the issue of retirement security, said Sharrett. “My guess is, don’t count on further deferments,” he said, adding that one of the things the government looked at as it developed the plan was ways the ORPP could fit into a CPP enhancement.
Ontario’s Minister of Finance is to meet with his provincial and territorial counterparts in June to discuss CPP enhancement.