Ontario has a retirement savings problem. Approximately ¼ to 1/3 of Ontarians are not adequately saving for retirement and almost 1.3 million Ontarian workers do not have access to workplace pension plans. Businesses overwhelmingly agree that this problem needs to be addressed, with 72% of Ontario businesses indicating in a recent Ontario Chamber of Commerce survey that they believed pension reform should be a priority of government.
The Ontario government has introduced legislation for an Ontario Registered Pension Plan (ORPP) that will be modelled after the CPP, complete with mandatory employer contributions. The ORPP is scheduled to come into effect January 1, 2017. It has concurrently introduced legislation for a voluntary Pooled Registered Pension Plan (PRPP).
If your eligible business does not already have a similar retirement savings vehicle in place, which has yet to be defined by the government, you will have an automatic increase of up to 1.9% on your payroll taxes starting in 2017. For more information, please see the following:
- As a volunteer member of Halton Hills Chamber of Commerce Economic Development Committee, I had the opportunity to attend a small group feedback session on the ORPP hosted by Associate
- Minister Mitzie Hunter. The press release for this contains information on the ORPP and questions from employers about the program. Economic Development Committee attends a small group feedback session on the provincial pension plan
- Ontario Government Website on the ORPP.
- Great article from Slaw Magazine regarding both the ORPP and PRPP.
Many business owners, particularly owner/operators, will want to keep informed of the progress of this legislation.