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Thursday, August 13, 2015

Kathleen Wynne doubles down on pension plan that will cost TBD and solve (insert)

On Tuesday morning, Ontario Premier Kathleen Wynne stood in front of a group of reporters as they asked her questions about the new provincial pension plan, to be rolled out in phases between 2017 and 2020. The premier had just delivered a near 20-minute monologue about the accolades of the new program, despite the fact that many of the specifics will surely depend on who forms the new federal government after the October election. Indeed, it probably would have made more sense to give an update in the fall, but why put off until tomorrow when you can remind Ontarians that Stephen Harper is “standing in the way” of comfortable retirement today?

Tuesday marked the first time Wynne clarified some of the exemption rules of the Ontario Retirement Pension Plan (ORPP), which the Liberals campaigned on during last year’s provincial election. As of 2017, companies with more than 500 employees will be required to start contributing to the plan, unless they already offer comparable mandatory defined benefit or contribution pension plans. Those without will be required to contribute 1.9 per cent of each employee’s salary up to $90,000, which combined with an equal contribution from employees will mean a total of 3.8 per cent. According to briefing documents, those earning $45,000 would contribute $2.16 per day to the plan, whereas an employee earning the maximum amount — $90,000 —would contribute $4.50 per day. By the time the program is fully implemented to include all employers by 2020, the government expects 3.5 million Ontarians will be covered by the ORRP.

Naturally, the briefing left some questions unanswered: How will the ORPP incorporate self-employed Ontarians? Would the Ontario government scrap the program if the federal government expands CPP? And what will be the administrative costs of rolling out the program?

The answer, in each case, was essentially a shrug...

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