Ontario Pension Plan will cost anywhere from $2.16 to $4.50 a day
The pension plan will be fully implemented by 2020 affecting about 3.5 million Ontario with benefits starting to be paid out two years later.
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Ontario’s proposed pension plan will cost participants anywhere from a Tims to a specialty coffee a day.
Details of the Ontario Retirement Pension Plan released Tuesday shows that a person — not already in a pension plan — making $45,000 a year will pay out $2.16 a day to $4.50 a day for someone making the maximum of $90,000 annually.
The plan, according to a Liberal government release, will be fully implemented by 2020 affecting about 3.5 million Ontario with benefits starting to be paid out two years later.
Like the Canada Pension Plan, the ORPP would be equally funded by both employers and employee.
According to the ORPP details, a person making $45,000 a year for 40 years will receive $6,410 a year for life, compared to $12,815 a year for life for the top $90,000 earners — equal to about a 15 per cent return after 40 years.
Participants must be 65 years old before they can collect.
“The ORPP is truly forward-looking, making Ontario a better place to work, invest and age. We are doing this for the next generation — our children and grandchildren to ensure they can retire with the security they deserve,” Premier Kathleen Wynne stated in a release.
Two-third of Ontario workers have no workplace pension plan.
Under the plan, companies that already have comparable pension plans will not have to participate in the ORPP.
If approved, the ORPP would start to be phased in 2017 beginning with large employers — 500 or more employees — without registered workplace pension plans.
Medium employers with 50 to 499 employees without registered workplace pension plans will start to contribute 2018.
The plan will not include small employers -- 50 and fewer -- without comparable pension plans until 2019.
Given Conservative Ottawa says it won’t administer the ORPP, the province is faced with the challenge of creating a new bureaucracy aided by the private sector to administer the plan.
The proposed plan when fully implemented would bring in about $3.5 billion annually.
“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.”