Don’t re-invent the wheel

Premier Kathleen Wynne unveiled the Ontario Retirement Pension Plan (ORPP) yesterday.
The plan will be phased in over time. It will not be fully implemented until 2020. Benefits will begin being paid out in 2022.
This was Wynne’s election issue and comes with opposition from the governing federal Conservatives.
Polls show most Ontarians support the additional pension plan, which could almost equal the value of their Canadian Pension Plan. Supporting this initiative will be good for Ontario residents providing them with a more secure future into which they can retire.
The province has estimated that 3.5 million of the 6.9 million workers in Ontario will be covered by the ORPP. Those employees do not have a pension plan with their employer. The majority of those workers do not have savings or RRSPs to retire with. Self-employed workers will be excluded from the plan.
It remains to be seen whether or not the Fraser Institute’s prediction that the money removed from people’s paycheques will result in a drop in personal savings.
The Wynne government has felt that Ontario residents were not saving adequately to retire.
For every dollar an employee’s salary is deducted, the employer will contribute a similar dollar amount. Prime Minister Stephen Harper has stated that this additional tax burden will impact employment growth in Ontario and would be bad for the economy.
The Ontario Chamber of Commerce supported this provincial initiative. Many businesses have volunteered that the mandatory costs will delay expansion and raises.
A whole new Ontario Pension Plan bureaucracy will have to be created by the Ontario government to manage the $3.5 billion that will flow into their coffers. There already exists an effective, efficient system operated by Canada Revenue Agency called the Canada Pension Plan.
Wouldn’t it would make more sense for the provincial and federal government to bring the two pensions under one roof? Ontario doesn’t have to reinvent the wheel.


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