Premier Wynne Unveils Key Details in Ontario Retirement Pension Plan

Premier Kathleen Wynne
Premier Kathleen Wynne
Premier Kathleen Wynne
Premier Kathleen Wynne

TORONTO – NEWS – Premier Kathleen Wynne today announced key details in the design of the Ontario Retirement Pension Plan (ORPP). The ORPP would help close the retirement savings gap for the two out of three Ontarians who do not have a secure workplace pension plan.

“The ORPP is truly forward-looking, making Ontario a better place to work, invest and age. We’re doing this for the next generation — our children, and our grandchildren — to ensure they can retire with the security they deserve,” stated Premier Kathleen Wynne.

“The best approach for helping people achieve retirement security is to ensure that all Ontarians belong either to the ORPP or a comparable workplace plan. After a lifetime of contributing to the economy, Ontarians deserve a secure retirement future. Growth in retirement savings means higher incomes and consumption by retirees, and helps our economy better cope with an aging population,” added Charles Sousa, Minister of Finance.

Ontario Chamber of Commerce Encouraged

The Ontario Chamber of Commerce (OCC) is encouraged by the government’s decision to expand the definition of comparability under the ORPP to include some Defined Contribution (DC) plans. This means that employers who already provide certain DC pension plans for their employees will be exempt from contributing to the new ORPP. The OCC is also encouraged by a longer phase-in period announced today, which will help many Ontario businesses transition into the plan.

“Today’s announcement is a step in the right direction,” said Allan O’Dette, President & CEO of the OCC. “Broadly speaking, the Government of Ontario has responded to our advocacy efforts. Despite today’s announcement, we remain concerned that the ORPP in its current form will have a negative impact on business competitiveness.”

In June, the OCC and a coalition of over 150 businesses, sector associations, chambers of commerce, and boards of trade came together to urge the government to expand its definition of pension plan comparability to include capital accumulation plans, including, but not limited to, DC plans.

Despite today’s announcement, the OCC warns that in its current form, the ORPP will raise costs for the majority of businesses who operate in the province, including those employers that offer non-comparable plans like Group RRSPs. Recent OCC survey data indicates that if faced with mandatory increased contributions under the ORPP, 44 percent of businesses would reduce their current payroll or hire fewer employees in the future.

“We remain deeply concerned about the cumulative burden facing Ontario employers,” said O’Dette. “Rising electricity prices, the introduction of a cap and trade system, and the ORPP will further add to the cost of doing business in Ontario. This is why we have asked the government to conduct and publicly release the results of an economic impact analysis of their proposed pension plan.”

After extensive consultations on the design of the ORPP, which included over 1,000 responses to the consultation paper, several key elements have now been finalized:

  • The ORPP would not apply to those currently in a comparable workplace pension plan. A comparable plan is one that provides a predictable stream of replacement income and an adequate standard of living in retirement similar to the benefit that would be provided by the ORPP. Qualifying plans — including defined contribution plans — would need to meet a minimum contribution threshold, be locked in and be regulated by existing provincial pension standards.
  • Enrolment would be phased in to ensure the ORPP is focused on employees without access to a plan and to give employers time to adapt.
  • Like the CPP, the ORPP would be funded by equal co-contributions from both employers and employees.
  • Contributions would also be phased in, reaching 1.9 per cent each from employers and employees by 2021.
  • Benefits would be paid starting in 2022. They would be earned as contributions are made, ensuring that the system is fair and younger generations are not burdened with additional costs related to benefits for older workers.
  • Every employee in Ontario would be part of the ORPP or a comparable workplace pension plan by 2020.

Building a more secure pension plan so everyone can afford to retire is part of the government’s four-part plan to build Ontario up, which also includes investing in people’s talents and skills, making the largest investment in public infrastructure in Ontario’s history, and creating a dynamic, innovative environment where business thrives.


  • Pension coverage is lower for young workers than for any other age group. In 2012, only about one quarter of workers aged 25 to 34 participated in a workplace pension plan, compared to nearly half of workers aged 45 to 54.
  • The ORPP would aim to replace 15 per cent of an individual’s earnings, up to $90,000 (in 2014 dollars).
  • Consistent with other pension plans in Ontario, the costs of administering the ORPP would be covered by the plan, not taxpayers. Contributions and investment funds would be held in trust for ORPP beneficiaries and would not form part of general government revenues.
  • If approved, the ORPP would come into effect on January 1, 2017, and would be overseen by an arm’s-length administration corporation with a strong governance structure.
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