New Ontario Retirement Pension Plan | KPMG | CA

Ontario Launches Consultations on New Ontario Retirement Pension Plan

New Ontario Retirement Pension Plan

Inviting public feedback on key aspects of the new Ontario Retirement Pension Plan.

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Ontario Launches Consultations on New Ontario Retirement Pension Plan

Ontario recently released a consultation paper inviting public feedback on key aspects of the new Ontario Retirement Pension Plan (ORPP). The government is seeking input on the 36-page paper, "Ontario Retirement Pension Plan: Key Design Questions", until February 13, 2015. In particular, Ontario is seeking feedback on:

  • Defining a comparable workplace pension plan - Workers already participating in a comparable pension plan would not be required to enroll. However, a clear definition of what constitutes a comparable plan is required to clarify membership in the ORPP.
  • A minimum earnings threshold - Individuals earning below the minimum threshold would not be required to contribute. However, Ontario is seeking consultations on whether this threshold should mirror the Canada Pension Plan's $3,500 minimum earnings threshold.
  • Supporting the self-employed - Self-employed individuals would be exempt from participating in the ORPP. However, Ontario is asking for input on how to assist these individuals in saving for their retirement.

Ontario said that feedback on questions related to the delivery, administration and the phased implementation of the ORPP will be considered as the province moves toward implementing the plan in 2017.

Background

The 2014 Ontario budget proposed a new provincial pension plan based on the key features of the CPP. Ontario Bill 56, which contains measures to implement the ORPP, received first reading on December 8, 2014. The bill includes certain basic requirements of the ORPP to be implemented by January 1, 2017.

The plan requires that the ORPP collect equal contributions from eligible employers and eligible employees (not exceeding 1.9% each, or 3.8% in total), up to a maximum annual earnings threshold of $90,000 as adjusted for the percentage increase in the yearly maximum pensionable earnings under the Canada Pension Plan between 2014 and 2017.

The bill includes an exception to participation in the ORPP where the individual participates in a comparable workplace pension plan.

The bill also establishes the duties of an administrative entity including collection and investment of contributions, administration of benefits and requirements for communications and reporting.

For more information, contact your KPMG adviser.

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