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ORPP Thinking Should Start Now

Employers who must join the Ontario Retirement Pension Plan (ORPP) should start thinking now about strategies to address the cost, says Katherine M. Pollock, a partner at Fasken Martineau. In the pensions and benefits group seminar ‘The Employers' Guide to the Ontario Retirement Pension Plan,’ she said they will need to consider how they are going to keep total compensation and payroll costs even. Employers will be required to contribute 1.9 per cent of an employee’s pay to the ORPP. In some cases, they will need to determine if they even can change compensation, existing retirement plans, and other benefits without running into the risk of constructive dismissal actions or breach of contract legal actions. In dealing with unionized environments, the issue is deciding when to make the changes, now or at the next collective bargaining session. She said employers who start talking about changing compensation to make the impact of the ORPP neutral also have to be careful that they don't take away too much. In terms of what employers are doing to mitigate the cost, she said a Canadian Federation of Independent Business survey suggests seven in 10 employers plan to freeze wages or eliminate positions.

Courtesy of Benefits and Pensions Monitor website News Alerts 

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