(TORONTO, ON) – Increased life expectancy and low personal savings rates add pressure when preparing for retirement, so Ontario is moving ahead with a first-of-its-kind, mandatory provincial pension plan that would build on the strengths of the Canada Pension Plan (CPP) and support long-term economic growth.
In light of the federal government’s on-going refusal to enhance CPP, the Ontario Retirement Pension Plan would take a balanced approach to support workers in the province. It would especially help middle-income earners without workplace pension coverage and would be cost-effective, responsible and designed to meet the needs of a 21st century workforce.
Despite consensus among provinces and territories to continue talks on an enhancement to the CPP, the federal government unilaterally shut down discussions.
"The federal government has consistently refused to commit to an enhancement of the CPP, so Ontario is leading the way with the ORPP,” said Mitzie Hunter, Associate Minister of Finance. “After a lifetime of hard work and contributing to the economy, Ontarians deserve better than to face lowering standards of living in retirement. Without help, that future is discouraging for many, especially since two-thirds of Ontario workers don’t have access to a workplace pension and many are unable to save enough on their own to provide for a secure retirement."
The ORPP would:
- Provide a predictable stream of income that is indexed to inflation and paid for life in retirement.
- Be mandatory for the more than three million Ontarians without a workplace pension plan, and require equal contributions from employees and employers.
- Operate at arm’s length from government and be responsible for managing investments associated with annual contributions of approximately $3.5 billion.
- Support long-term economic growth as pension payments from the ORPP would help people maintain their standard of living in retirement and continue spending.
- Be developed in consultation with pension experts, business, labour, individuals, families and communities across the province in order to ensure that a broad range of perspectives is heard.