Ontario Premier Kathleen Wynne plans to reintroduce last month’s budget within 20 days after voters gave her a majority mandate on Thursday night.

The budget included plans to create the Ontario Retirement Pension Plan (ORPP), which would initially expand pension coverage to more than three million working Ontarians.

The ORPP would include the following design features:

  • Provide a predictable stream of income in retirement by pooling longevity and investment risk, and indexing benefits to inflation, similar to the Canada Pension Plans’s (CPP) retirement benefit.
  • Require equal contributions to be shared between employers and employees, not exceeding 1.9% each (3.8% combined) on earnings up to a maximum annual earnings threshold of $90,000. The ORPP maximum earnings threshold would increase each year, consistent with increases to the CPP maximum earnings threshold.
  • Aim to provide a replacement rate of 15% of an individual’s earnings, up to a maximum annual earnings threshold of $90,000.

The plan would be introduced in 2017 to coincide with the expected reductions in Employment Insurance premiums.

Reaction to the plan was mixed when it was unveiled last month.

“Ontario has clearly placed a high priority on closing the retirement savings gap,” said Andrew Hamilton, partner, retirement consulting practice, with Aon Hewitt. “While much remains to be done, today’s announcement is a good start in an ambitious effort to address these important challenges.”

“The majority of Ontarians who are struggling to save for their retirement simply can’t afford to,” said Dan Kelly, president of the Canadian Federation of Independent Business. “Hitting them with a higher payroll tax deduction on their paycheque is not going to help them.”

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Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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Robert in Vancouver:

Ontario, a have not province because of reckless and corrupt government spending over the past 10 years has re-elected the same corrupt government.

Re-electing the same corrupt Liberal government in Ontario will hurt all Canadians for decades due to higher interest rates on our national debt, lower national GDP, lower tax revenues due to higher unemployment and destruction of business.

Shame on everyone in Ontario who voted Liberal.

Friday, June 13 at 12:41 pm | Reply

Ric Harry:

I have a few questions:
What about the many workers where the employers don’t have a plan nor willing to contribute?
What about older workers with fewer years to contribute that don’t have a pension beyond CPP and TFSAs?

Friday, June 13 at 11:49 pm | Reply

David Burnham:

I totally ill conceived tax grab on businesses which means we will see many small businesses laying off staff as a result.

Sunday, June 15 at 11:08 pm | Reply

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