The Ontario government has announced a series of design and feature details for the Ontario Retirement Pension Plan (ORPP).
In a press conference this morning, Ontario Premier Kathleen Wynne and Associate Minister of Finance Mitzie Hunter announced the details, which cover the structure of ORPP benefits, compliance and enforcements, plan comparability and member participation.
Elaborating further, Hunter said the new design and feature details, which have been shared with the Canada Revenue Agency, include:
- A clearer definition of employment so that employers can determine which employees are eligible for the plan.
- Additional details on the comparability test so employers can determine whether they currently offer a comparable workplace pension.
- The inclusion of a modern, robust survivor benefit so that even single employees can chose a beneficiary for their pension.
- Details of the indexation of the benefit to ensure its sustainability in the long term.
For employers, the key details include the fact that the government will be assessing comparability at the level of a subset of employees to acknowledge different benefits for part- and full-time staff. The government has also addressed waiting periods. On that issue, employees who are in a waiting period to join a company’s plan will have to be members of the ORPP in the meantime. In addition, voluntary workplace pension plan contributions won’t be applicable when determining if a defined contribution plan is comparable to the ORPP, the government announced today. Employers that have comparable workplace pension plans would also be able to opt in to the ORPP in the fourth wave of the ORPP enrolment schedule or at any time thereafter.
See full details and features shared today
“The plan is designed to ensure the ORPP benefits will be sustainable for the next 100 years,” said Hunter. “The goals is for every Ontarian to be part of the ORPP or a comparable workplace pension plan by 2020.”
According to Wynne, there will be a bill in the spring session to discuss the framework for the ORPP’s design. “We want to ensure it is as streamlined as possible,” she added.
She also said the ORPP is on track to be introduced on Jan. 1, 2017, as planned, a timeline that has created concerns for businesses. “We learned today that government will not extend ORPP implementation timelines, as we had asked,” the Ontario Chamber of Commerce said in a statement after the announcement.
“This will put pressure on both government and employers to meet the January 1, 2017 implementation timeline, which we believe is very ambitious. These tight timelines necessitate increased collaboration between government and employers over the next 11 months.”
Also read:
ORPP will deliver a serious dose of pension awareness
ACPM urges government to delay ORPP
ORPP progress report published
What you need to know about the ORPP