Category: Pension Benefits

10 Aug

Survivor’s Pension: Rights of the Twice-Widowed Woman

Arielle Di Iulio Elder Law, Pension Benefits Tags: , , 0 Comments

For many, a survivor’s pension is an indispensable source of income following the death of a spouse. In the recent case of Weatherley v. Canada (Attorney General), 2021 FCA 158, before the Federal Court, one widow fought to maximize her survivor’s pension benefits by challenging the constitutionality of the Canada Pension Plan, R.S.C. 1985, c. C-8 (the “CPP“).

The applicant, in this case, was an elderly woman who was twice-widowed. Under the CPP, after a spouse dies, the surviving spouse can receive a survivor’s pension. If the surviving spouse remarries and their second spouse dies, subsection 63(6) of the CPP limits the surviving spouse to only one survivor’s pension, being the higher of the two. In Weatherley, the applicant sought two survivor’s pensions before the Social Security Tribunal on the ground that s. 63(6) of the CPP discriminates against her on the basis of sex contrary to section 15(1) of the Canadian Charter of Rights and Freedoms (the “Charter“). She argued that s. 63(6) draws a distinction based on sex because the majority of people who are twice-widowed are women. Furthermore, s. 63(6) denies a benefit because, without this provision, she would receive symbolic recognition for non-monetary contributions she made to her first marriage.

The General Division agreed with the applicant, finding a Charter infringement. The Appeal Division reversed that decision. On the application for judicial review, the Federal Court found that s. 63(6) of the CPP is constitutional and does not discriminate on the basis of sex.

The Honourable Justice David Stratas, writing for the Federal Court, explained in his decision that Charter cases call for a careful examination of context. In this case, the context is informed by 1) the nature of the scheme established and regulated by the CPP, and 2) the nature of the survivor’s pension under that scheme. He explained that the scheme is a national “contributory plan”, not a “social-welfare” scheme. It was never intended to meet the needs of all contributors in every conceivable circumstance but rather to provide partial earnings replacement in certain circumstances, such as the death of a wage-earning spouse. Subsection 63(6) reflects the insurance nature of the scheme: an individual can only lose one wage-earning spouse at a time.

To establish that s. 63(6) infringes s. 15(1) of the Charter, the applicant was required to show that s. 63(6) creates a distinction based on an enumerated or analogous ground, and s. 63(6) imposes burdens or denies a benefit in a manner that has the effect of reinforcing, perpetuating or exacerbating disadvantage. Justice Stratas concluded that the evidence filed before the Social Security Tribunal did not establish that s. 63(6) draws a distinction on the basis of sex or denies a benefit.

First, there is no sex-based discrepancy in the demographics of the group the law could apply to, i.e., once-widowed survivors, and the demographics of the group the law did apply to, i.e., twice-widowed survivors. These two groups are nearly identical. Second, the evidence did not clearly show that twice-widowed survivors are disadvantaged as compared to once-widowed survivors and, in fact, there was some evidence to suggest that the former group fare better under the scheme. Additionally, Justice Stratas clarified that the survivor’s pension is not intended to recognize non-financial contributions made to a marriage. Instead, it was designed to provide a minimum income supplement determined, in part, by contributions made to the scheme by the spouse. For these reasons, no Charter infringement was found and the applicant’s claim was dismissed.

In his decision, Justice Stratas went on to state that even if s. 63(6) of the CPP somehow violates s. 15(1) of the Charter, then it is a reasonable limitation on rights and, thus, saved under section 1 of the Charter.

The Federal Court’s decision in Weatherley offers useful insight into the CPP and Canada’s pension benefits scheme as a whole. It also suggests that the judiciary will continue to give significant deference to Parliament when tasked with scrutinizing complex benefits legislation such as the CPP.

Thanks for reading!

Arielle Di Iulio

10 Jun

Dependants and Their Entitlement to a Deceased’s Estate – A summary of Earl v. McAllister, 2021 ONSC 4050

Sanaya Mistry Estate & Trust, Estate Litigation, Litigation, Pension Benefits, Support After Death Tags: , , , 0 Comments

In the recent decision of Earl v. McAllister, 2021 ONSC 4050, the Divisional Court ordered 100% of the net estate of the Deceased to be used for the benefit of the minor dependants, to the exclusion of the Deceased’s wife.

Leo McAllister (the “Deceased”) died on May 3, 2017. He is survived by his wife (Barbara McAllister) and his two minor sons (the “Sons”) from a previous relationship with Tammy Earl. When the Deceased learned he was dying, he started to put his affairs in order, including executing a Will and leaving his estate (the “Estate”) to his wife and signing consents required to transfer the designed beneficiaries on one of his pensions from Ms. McAllister to his Sons.

Ms. Earl brought an application on behalf of her Sons, for their support, pursuant to Part V of the Succession Law Reform Act. The Applicant argued that for the purposes of this application, the value of two pensions and a life insurance policy should be included in the value of the Estate of the Deceased, failing which, the Estate would have a shortfall of $12,926.82 due to the Estate’s liabilities. She also argued that the entirety of the Estate should be used for the benefit of her Sons, as they are both dependants of the Deceased.

The Application Judge agreed that one of the pensions and the life insurance proceeds should be included in the value of the Estate, valuing it at $167,062.52. The Application Judge ordered the net value of the Estate to be split in two halves, one to be used for the benefit of the Sons and one to be distributed to Ms. McAllister. The Application Judge also ordered $30,000 of the Sons’ half to be paid into Court, to be paid to the Sons when they turn 18.

Ms. Earl appealed this decision, arguing that both pensions should be included in the value of the Estate, the entirety of the Estate should be used for the benefit of her Sons and that the $30,000 which the Application Judge ordered to be paid into court should now be paid out to the Appellant, for the benefit of the Sons.

For the purposes of this article, we will focus on the Divisional Court’s decision in respect of the whether to include both pensions in the value of the Estate and the manner in which the Estate is to be distributed.

Pensions

The Deceased had  two pension plans. The first was from the Union’s Province of Ontario Pension Plan, the value of which was included in the Estate by the Application Judge. The second was the Union’s “Canada” Pension Plan (administered in the US), which provided for a pre-retirement surviving spouse benefit under which the Respondent, as a surviving spouse, was entitled to a lump sum payment of $88,117.40.

The Divisional Court found that it was not open to the Deceased to designate someone other than his spouse to receive the pre-retirement benefit under the second pension and while the Respondent could have waived her entitlement to the receipt of that benefit, she could not be deprived of that benefit without her agreement.

As a result, the second pension was not included in the value of the Estate.

 

Distribution of the Net Value of The Estate

The Divisional Court found that in determining the issues between the parties, the needs of the Sons in the balancing exercise should be paramount. The court weighed the financial circumstances of the Sons against the financial circumstances of the Respondent.

Particularly, the court noted that the Sons live in precarious financial circumstances and there is very little income to support them apart from public finances and loans. The Sons live in the home of their mother’s parents. The appellant’s affidavit contained information concerning monthly expenses and the loss of the Deceased’s group health benefits. The Applicant’s evidence was that her yearly expenses exceed her income. Further, the Deceased was active in his Sons’ lives and paid the Appellant $300 per week to support his Sons until his death.

In contrast, the Respondent was not financially dependant on the Deceased, had good income of approximately $100,000 annually, had no extraordinary expenses, owned a home (although with a mortgage) and had made some provisions for her own pension. The Respondent and the Deceased had been married for just over two years at the time of death. The Respondent was also to continue to receive the benefits from the second pension.

The Divisional Court cited  Madore-Ogilvie v Ogilvie Estate (2008), 88 O.R. (3d) 481 (C.A.), noting the following:

“Where there are insufficient assets to adequately provide for any or all of a deceased’s dependants, the circumstances of the case may warrant the exercise of an application judge’s discretion to use the limited assets for the benefit only of the minor dependants, to the exclusion of his wife.”

The Divisional Court concluded that in the present case, the circumstances warranted the use of the limited assets for the benefit of the Sons only, to the exclusion of the Respondent.

Thank you for reading.

Sanaya Mistry

10 Apr

The Policy of Setting Policy: Cotnam v Rousseau and Judicial Activism

Hull & Hull LLP Beneficiary Designations, Estate & Trust, Estate Planning, Litigation, Pension Benefits, Public Policy, RRSPs/Insurance Policies, Support After Death Tags: , , , , 0 Comments

The practice of injecting policy considerations into court decisions has long been a tenet of the Ontario judiciary.  However, such considerations may arguably raise questions that go beyond the scope of the decision.  Cotnam v Rousseau, 2018 ONSC 216, is one such case.

In Cotnam, the Court was tasked with determining whether a pre-retirement death benefit received by a surviving spouse was available to be clawed back into an Estate pursuant to section 72 of the Succession Law Reform Act (the “SLRA”).  The Respondent took the position that section 48 of the Pension Benefits Act (the “PBA”) sheltered the death benefit from being clawed back given that she was the spouse of the Deceased.  The Court disagreed and held that such benefits ought to be available for claw back in order to prevent irrational outcomes resulting from their exclusion.

In the context of the facts at play in Cotnam, the Court reasoned in favour of equity, in particular, to ensure a dependant disabled child of the Deceased was properly provided for. However, the Court’s reasons appear to gloss over a fundamental conflict between the SLRA and the PBA, a clash about which the estates bar might have appreciated some judicial commentary.  Specifically, the Court held that the provisions of the SLRA ascribing pension death benefits as available to satisfy a claim of dependant’s relief ought to prevail over the PBA’s provisions sheltering them from claw back.

Section 114 of the PBA provides that, “[i]n the event of a conflict between this Act and any other Act […] [the PBA] prevails unless the other Act states that it is to prevail over [the PBA].”  The SLRA, in contrast, is silent as to whether its provisions are to prevail over those of the PBA.

However, the Court’s reasons make no mention of the interplay between section 114 of the PBA and the equities of ensuring the dependant daughter in Cotnam was properly provided for.  While we may opine on the fact that the outcome in Cotnam favours equity over rote statutory interpretation, the estates bar is left to grapple with the apparent inconsistency with the intention of the Ontario legislature, and whether it will affect similar decisions going forward.  As of this date, no written decisions have yet interpreted Cotnam, nor has the decision been appealed.  Accordingly, it may be some time before the impact of the decision, if any, is felt.

Thanks for reading.

Garrett Horrocks

If you enjoyed this blog, please consider these other related posts:

Dependant Support and Pre-Retirement Death Benefits

Rehel v Methot: Life Income Funds and Spousal Entitlements

05 Feb

Rehel v Methot: Life Income Funds and Spousal Entitlements

Umair Beneficiary Designations, Estate Planning, Executors and Trustees, Litigation, Pension Benefits, Trustees, Wills Tags: , , , , 0 Comments

In the recent case of Rehel v Methot, 2017 ONSC 7529, the Honourable Justice Gomery was asked to provide directions regarding the entitlement to money held in a life income fund account owned by the deceased testator.

Background Facts

William (the “Deceased”) made a Last Will and Testament one day before he committed suicide. At the time of his death, the Deceased held a life income fund account (the “Account”) at Scotiabank. The Deceased’s spouse, Sharon (“Sharon”) was named as the beneficiary of the Account at the time that it was opened in 2013.

However, in his Will, the Deceased directed his Estate Trustee to use the funds in the Account to pay off any debts owing at the time of the Deceased’s death. The Estate Trustee took the position that the designation under the Will replaced the prior beneficiary designation.

Application of Provincial Pension Legislation

Before engaging in a discussion over which designation should prevail, the first question before the Court was whether Sharon was automatically entitled to the proceeds of the Account as the Deceased’s surviving spouse.

The Deceased and Sharon were married in Quebec in 2005, and moved to Ontario in 2008. However, the money in the Account was from a pension plan registered in Quebec. The Court was asked to consider if provincial pension legislation in Ontario or Quebec was applicable to the distribution of the Account.

Subsection 48(1) of the Ontario Pension Benefits Act states that if a member who is entitled to a deferred pension under a pension plan dies before payment of the first installment, the surviving spouse of the person is entitled to receive payment. However, under subsection 48(3) of the Act, a spouse is not automatically entitled to the proceeds of a deferred pension if the parties are “living separate and apart” at the time of death.

The Estate Trustee argued that subsection 48(3) applied, and adduced evidence that suggested that the parties were separated as of the time of the Deceased’s death. Sharon filed an affidavit disputing that she had separated from the Deceased, and asserted that she and the Deceased had only discussed the possibility of a separation at the time of his death.

The Estate Trustee filed additional affidavit evidence that led Justice Gomery to conclude “beyond a doubt” that the marriage had broken down and that the parties were negotiating their separation from each other. Justice Gomery thus concluded that the parties were separated under Ontario law, and that Sharon was not automatically entitled to the proceeds under the Pension Benefits Act.

Another question before the Court was whether Quebec law applied to the question of Sharon’s entitlement to the Account. Under Quebec pension legislation, the automatic right to spousal benefits is “terminated by separation from bed and board.” The Estate Trustee asserted that the application of Quebec law made no difference, whereas Sharon asserted that “separation from bed and board” meant something different than “living separate and apart.”

Justice Gomery noted that the law of another province is “foreign law,” and must be proved. Absent such proof, Justice Gomery held that the Court must assume that the foreign law is the same as Ontario law. Thus, Justice Gomery concluded that Sharon was not entitled to the death benefit under the Deceased’s pension plan by right.

Next Question: Which Beneficiary Designation Prevails?

Given Justice Gomery’s conclusion that Sharon was not entitled to the Account by operation of statute, the Court concluded that Sharon would only be entitled to the funds in the Account if she was the designated beneficiary as of the Deceased’s death.

In tomorrow’s blog, I will discuss Justice Gomery’s discussion of the terms of the Deceased’s Will, and whether the direction to the Estate Trustee overrode the earlier designation in Sharon’s favour.

Thank you for reading,

Umair Abdul Qadir

11 Aug

The Chambers Global Private Wealth Guide

Nick Esterbauer Charities, Common Law Spouses, Estate & Trust, Estate Planning, Executors and Trustees, General Interest, News & Events, Pension Benefits, Power of Attorney, RRSPs/Insurance Policies, Trustees, Wills Tags: , , , , , , , , 0 Comments

Earlier this year, Ian M. Hull, Suzana Popovic-Montag and I contributed the law and practice content for the Canada chapter to the Chambers and Partners 2017 Global Private Wealth Guide.

The Global Private Wealth Guide includes a chapter for nineteen different countries and features practical information regarding tax issues, succession law, the status of trusts, business and charitable planning, and the role of fiduciaries in each jurisdiction.  The Guide also features a profile page for each country, in which general information related to relevant business practices is summarized.

The Private Wealth Guide is a helpful tool for lawyers assisting clients who may hold property or business interests in multiple jurisdictions.  Among the interesting features of the website for the Guide is the option of comparing the treatment of each issue between two or more jurisdictions.  For example, it offers the opportunity to obtain quick and reliable information regarding any differences between the treatment of marital property in Canada and the United States.

A complete electronic copy of the guide is available here.  A link has also recently been added to the resources section of our website.

Thank you for reading and have a great weekend.

Nick Esterbauer

30 May

Contracting Out of Statutory Entitlements?

David M Smith Beneficiary Designations, Common Law Spouses, Estate Planning, Pension Benefits, RRSPs/Insurance Policies, Uncategorized Tags: , , 0 Comments

As an estate planning tool, legal and financial advisors often impress upon their clients the benefits of designating beneficiaries of certain instruments such as RRSPs, TFSAs, and life insurance policies. In the absence of a beneficiary designation, the proceeds will fall into the estate and attract Estate Administration Tax and be available to creditors of the Deceased, possibly thwarting the objectives of the estate plan.

Pensions, however, are a special case.  Like Part V of the Succession Law Reform Act, section 48(7) of the Pension Benefits Act is remedial in nature and contemplates the necessity to provide safeguards for surviving spouses, including common law spouses.  In short, if a beneficiary is not designated on the death of a member of a pension plan, the proceeds do not fall into the estate; rather, the surviving spouse is entitled to the asset.

But what if the spouses have entered into a cohabitation agreement prior to the relationship?  What kind of language will suffice to contract out of this statutory entitlement if the pension plan member had not designated a beneficiary during his or her lifetime?

In Burgess v. Burgess Estate, the Ontario Court of Appeal considered whether a former wife of the deceased was entitled to receive all of the benefit available under the deceased’s deferred profit sharing plan for which she was the sole designated beneficiary, or whether she was entitled only to one-half of the benefit in accordance with the parties’ separation agreement, which read as follows:

“Except as specifically provided, neither the Husband nor the Wife will make a claim to a share in any pension of the other, including but not limited to any company pension plans, registered retirement savings plans and registered home ownership plans, provided that the Wife shall be entitled to one-half of the benefits under the Husband’s deferred profit sharing plan.” (emphasis added)

As a result of the express and specific wording of the separation agreement, the Court concluded that the former wife was restricted to receiving half of the benefit.

Following the principle in Burgess, the Ontario Superior Court of Justice in Conway v. Conway Estate, concluded that the separated spouse in similar circumstances was entitled to receive the pension benefit when there was no express reference in the Separation Agreement precluding her entitlement:

“…there is no provision like the one in Burgess. There is no express term which has the effect of revoking the designation of [the separated spouse] as beneficiary of the pension benefit or precluding her from receiving the benefit as beneficiary.” (emphasis added) (at para. 26)

Accordingly, having regard to the foregoing authorities, in order for a spouse to contract out of a benefit, the Court would appear to require specific and express language to such effect. A general release will not be sufficient.

It is a nice question whether a statutory entitlement under the Pension Benefits Act is to be considered as being in exactly the same category as a beneficiary designation.  Certainly the plan which passes to the recipient is the same in either case and, arguably, the hurdle for contracting out of a statutory entitlement may be higher as compared to a beneficiary designation.  In any event, the caselaw should be equally applicable to either situation

Thanks for reading,

David Morgan Smith

Other Articles You Might Be Interested In

The Ontario Retirement Pension Plan – Implementation and How It Works

The Proposed Made-In-Ontario Pension Plan

Pension Plans Take a Hit: The Chain Reaction that Follows

 

01 Aug

Have you ever considered what your retirement income will look like?

Hull & Hull LLP General Interest, In the News, Pension Benefits 0 Comments

Saving for retirement is always a hot topic in the Estates and Trusts bar and it should really be a hot topic with anyone over the working age.

There was an interesting article yesterday in the Globe and Mail about our “blind” reliance on pension income to support us in retirement.  Mr. Carrick insists that it is not enough to just put money away but that we should all be proactive in determining what returns we may expect later on.

Service Canada actually provides a very neat Canadian Retirement Income Calculator that is free and easy to use to do just that.  In approximately half-hour, this Calculator is able to determine your retirement income information, including Old Age Security and Canada Pension Plan benefits.  More importantly, it allows you play with it and see the impact of increased savings.  Of course, this Calculator will only provide rough estimates and it should not be relied upon as financial planning advice.

Mr. Carrick’s article then goes on to discuss how a defined contribution pension plan member may attempt to calculate his/her pension income on retirement.  As the name suggests, a defined contribution pension plan only guarantees an employer’s contribution without guaranteeing the employee’s pension income at the end of the day.  Apparently, there is an actuarial firm out there that claims to be able to estimate a defined contribution pension plan member’s replacement ratio, that is the percentage of employment income that the pension benefit will replace in retirement.

Hopefully the upcoming Civic Holiday will give us all the time to explore what our retirement income may look like.

Happy long weekend everyone!

Doreen So

29 Jul

No More Carrigan

Hull & Hull LLP Beneficiary Designations, Common Law Spouses, Pension Benefits 0 Comments

The Ontario Court of Appeal released their decision in Carrigan v. Carrigan Estate (“Carrigan”) on October 31, 2012.  Carrigan drastically changed our understanding of the priority scheme for the payment of pre-retirement death benefits to surviving spouses under the Ontario Pension Benefits Act (“PBA”).  Carrigan was an important decision which dealt with the issue of who, as between a common law and a legally married spouse, is the defined “spouse” that is entitled to a pension plan member’s pre-retirement death benefit and we have blogged about this topic extensively in the past, here, here and here.

Carrigan arose from an all too common situation in which the Deceased was survived by a common law spouse and a married spouse from whom he was living separate and apart.  The PBA’s “spousal” priority over and above a pension plan member’s designated beneficiary(s) was found to be inapplicable under such circumstances based on a very strict interpretation of the legislation by the Court of Appeal.  In other words, according to Carrigan, neither the common law spouse nor the married spouse had a spousal priority to the Deceased’s pre-retirement death benefit.  The married spouse in Carrigan ultimately received the Deceased’s pre-retirement death benefit as the Deceased’s designated beneficiary.

As the result of the Court of Appeal’s strict interpretation of the PBA, Bill 14, Building Opportunity and Securing Our Future Act (Budget Measures), 2014 was passed on July 24, 2014 effectively amending the PBA and the implications of Carrigan.  Bill 14 amends section 48 of the PBA to provide that a common law spouse who is living with a pension plan member on the date of death is entitled to his/her pre-retirement death benefit over and above a married spouse whom he/she was living separate and apart from and the member’s designated beneficiary(s), if the member dies on or after the date Bill 14 receives Royal Assent.  Royal Assent was given the same day so this is in fact the new state of the law with regard to pre-retirement death benefits under the PBA.

Congratulations to the OBA’s Carrigan working group and to all those involved in this legislative amendment for their superb advocacy and hard work.

Thanks for reading!

Doreen So

23 Jun

Bill C-591: Manslaughter, Murder and the Canada Pension Plan

Hull & Hull LLP Beneficiary Designations, General Interest, Pension Benefits 0 Comments

On Monday June 9, 2014, Dave van Kesteren, the Conservative MP for Chatham-Kent-Essex, introduced Bill C-591, “An Act to amend the Canada Pension Plan and the Old Age Security Act (pension and benefits)”.

The Bill seeks to plug a loophole in the Canada Pension Plan and the Old Age Security Act which allows persons who murder their spouses or parents to collect survivor’s benefits, including the Allowance of the Survivor, the CPP Death Benefit, the CPP Orphan Benefit, and the CPP Survivor Benefit.

The Bill would prohibit murderers from collecting these benefits. If the individual is eventually acquitted of murder, then their benefits would be restored.  The law would not apply to minor children who murder their parents.  Should an individual collect benefits and subsequently be found to be guilty of murdering the contributor, they would have to repay any benefits received.

Mr. Kesteren argues that the Bill is consistent with the principle of ex turpi causa – that criminals should not benefit from their crimes.

How terrible a thing to suffer the horror of family violence, how much more the horror of murder, but to have the added pain of witnessing someone profit from their crime, a clear violation to the long-standing common law principle of ex turpi causa, by way of collecting the victim’s survivor benefit, is not fair to the families of the murder victim, and it is an injustice that cannot be allowed to happen.

Indeed, a murderer may not benefit from his victim under common law, nor may he or she collect on life insurance proceeds for obvious public policy reasons.  There are, however, exceptions for the insane.

NDP MP for Hamilton-Mountain Chris Charlton introduced a similar bill three years ago which was not passed.  The difference between the two bills is that Ms. Charlton’s bill would have included manslaughter among the list of offences which would disqualify an individual from receiving survivor’s benefits.

Murder requires intent to kill, whereas manslaughter may come about by accident.  Since a person can be convicted of manslaughter without intending to kill the deceased, it may be argued that they are less morally blameworthy for their actions.  To take away survivor’s benefits would be to use the civil law system to inflict more punishment on the offender than the amount the criminal law system has already determined appropriate.

As Murray Rankin, the NDP MP from Victoria pointed out, however, murder may be reduced to manslaughter when it is provoked.  The Crown may also offer the accused a plea bargain to reduce a charge of murder to manslaughter in return for the accused pleading guilty.  To not include manslaughter in the bill, therefore, would mean that it would be possible for someone who intended to kill their spouse or parent to collect survivor’s benefits.

Caselaw on whether someone who is guilty of manslaughter may benefit from an estate or collect benefits has in fact addressed some of these subtle nuances.  In Attorney General of Canada v Constance St. Hilaire, the Federal Court of Appeal ruled that a beneficiary who accepted a plea bargain to reduce her charge from second degree murder to manslaughter was barred from collecting benefits from her spouse’s superannuation account because she had in fact murdered her spouse.  However, the Federal Court of Appeal was careful to note that it was not ruling that all cases of manslaughter would preclude inheritance.

Thank You for Reading,

Ian M. Hull

29 May

The Proposed Made-In-Ontario Pension Plan

Hull & Hull LLP In the News, Pension Benefits, Uncategorized 0 Comments

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.

Further coverage of the newly proposed ORPP may be found here and here.

Thanks for reading!

Doreen So

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