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ORPP Could Break Barriers

Ontario’s commitment to the ORPP initiative provides a unique opportunity to break through the historical barriers to full workplace pension plan coverage in Canada, say Keith Ambachtsheer, director emeritus of the International Centre for Pension Management at the Rotman School of Management, University of Toronto, and president of KPA Advisory Services; and Edward Waitzer holder of the Jarislowsky Dimma Mooney Chair in Corporate Governance and is director of the Hennick Centre for Business Law at Osgoode Hall Law School and the Schulich School of Business at York University. In a KPA Advisory, they say employees would benefit from being able to choose between the ORPP and a Private Retirement Pension Plan (PRPP) sharing similar features. The PRPP would offer a target pension benefit comparable to the ORPP’s. However, with the PRPP, the employer would have the option of choosing a higher target benefit with a higher contribution rate. With the PRPP option the employer could create a ‘one stop’ workplace plan solution using solutions offered by sophisticated large-scale institutions with proven delivery capabilities in investment, benefit administration, and client/member communications. However, they see challenges that will need to be addressed in moving forward with this proposal for competition in workplace pensions including the ‘high-cost’ issue. Because the PRPP is a commercial offering, it will be assumed to be high-cost. “Stepping back from the immediate public policy challenge, one can see a broader opportunity,” they say. Their paper is at Needed Innovation

Courtesy of Benefits and Pensions Monitor website News Alerts 

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