The Proposed Made-In-Ontario Pension Plan
Election season in Ontario has resulted in a proposal for a province wide pension plan to supplement the Canada Pension Plan (“CPP”).
The Liberals’ proposal for The Ontario Retirement Pension Plan (“ORPP”) involves employee contributions of 1.9% of their annual income up to $90,000.00 a year, which will be matched by their employers. It is specifically targeted to meet the needs of middle-income earners who are struggling to save enough for retirement and it is proposed to launch in 2017.
Just like the CPP, employees may start collecting benefits at age 65. However, unlike the CPP, not all Ontarians are eligible. The ORPP will be mandatory for those working in Ontario except for the self-employed, employees who are already enrolled in a private work pension plan, and employees working in federally regulated industries.
According to the CBC’s reporting of the Liberals’ proposal, based on projected figures of 40 years of working contributions,
- A worker who earned $45,000 over that period would collect $17,090 annually (including $10,680 from CPP).
- A worker who earned $70,000 over that period would collect $22,430 ($12,460 from CPP).
- A worker who earned $90,000 over that period would collect $25,275 ($12,460 from CPP).
Of course, not every one thinks well of this new proposal and only time will tell if this new proposal will become the first of its kind in Canada.
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