Ontario Announces Own Pension Plan in BudgetBy Sandrine Champigny | July 16 2014 02:12PM
In the budget tabled on July 14, the Ontario government announced its intention to proceed with its own mandatory provincial pension plan.
The Liberal government says its Ontario Retirement Pension Plan (ORPP) will offer benefits similar to those of the Canada Pension Plan (CPP), indexed to inflation. The plan aims to provide a retirement income stream equal to 15% of an individual’s earnings based on a maximum annual earnings threshold of $90,000.
Contributions will be mandatory and will be shared equally between employers and employees, not exceeding 1.9% each (3.8% combined). The ORPP maximum earnings threshold will increase each year, consistent with increases to the CPP maximum.
Those who are already members of a comparable workplace pension plan will not be required to enrol in the ORPP and, like the CPP, income below a certain amount will be exempt from mandatory contributions. The Ontario government is still consulting on how best to serve the needs of self-employed workers.
The ORPP will be introduced in 2017 and rolled out in stages over two years, beginning with the largest employers.