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Employers Should Prepare For ORPP


Employers should continue to prepare for both the Ontario Retirement Pension Plan (ORPP) and an expanded Canada Pension Plan (CPP), says a Hicks Morley ‘FTR Now.’ The majority Liberal federal government indicated during the election campaign that it would be prepared to consult with the provinces about expanding the CPP. While the Ontario government recently announced implementation details for the ORPP, it has consistently stated that an expanded CPP would be its preferred method of addressing the retirement income gap for employees in this province. In fact, while Ontario Premier Kathleen Wynne says her government will proceed with the ORPP and administer its own pension without any federal help, even though it could spend millions of dollars on an effort that could ultimately be scrapped. The rationale is that it will take a while to get other provinces on side with enhancing the CPP. When there is such an agreement, Ontario wouldn't need to create its own pension. In order for the CPP to be amended, the federal government and two-thirds of included provinces must agree and the included provinces must constitute two-thirds of the population. This consultation process could take years, says Hicks Morley. The Ontario government is prepared to continue moving forward with the ORPP to reduce the retirement income gap for Ontario employees, rather than wait for the possibility of an expanded CPP to crystallize. However, it hopes the new government may be more accommodating and share the existing CPP infrastructure, regardless of the status of CPP expansion. Given these developments, employers will likely want to continue preparing for ORPP.

Courtesy of Benefits and Pensions Monitor website News Alerts 

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