Two-thirds of Ontario’s workers do not participate in a workplace pension plan.
Ontario is addressing the issue through legislation that will bring coverage to more than 4 million workers by 2020. The government introduced the Ontario Retirement Pension Plan Act (Strengthening Retirement Security of Ontarians) on April 14.
Building a secure retirement savings plan is one of the pillars of the government’s economic plan, with the number one priority being to grow the economy and create jobs. The goal is to ensure every eligible employee, including the 75 per cent of young workers who don’t have access to an adequate workplace pension, is part of the Ontario Retirement Pension Plan (ORPP) or a comparable pension through their workplace.
If it passes, the act would provide workers with a predictable income in retirement, paid for life. Contributors would be provided with a pension of up to 15 per cent of their earnings, up to $90,000 (in 2017 dollars).
Over the long term, the ORPP is expected to add billions to the Ontario economy, according to a cost-benefit analysis by the Conference Board of Canada.
To make sure employers and employees have the information and time needed to prepare, enrolment for employers would begin on Jan. 1, 2017, with contributions beginning in stages on Jan. 1, 2018.
The legislation would set out the plan details including participation, contributions, benefit types, and plan sustainability. The act would also hold contributions in trust for plan members that will not form part of any government revenues.
Ontario is committed to working with the federal government on a national solution to address the needs of future retirees, but by moving forward with this legislation, Ontario is ensuring that if no national consensus on CPP enhancement is reached, retirement security can still be strengthened within the province.
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