February 3, 2016 – The Province outlined final design parameters for the Ontario Retirement Pension Plan (ORPP) in direct response to focused advocacy by the Ontario Chamber of Commerce (OCC). Last month, the OCC provided the Province with a letter outlining our outstanding concerns regarding implementation timelines.
As the Premier noted at the announcement, the design of the ORPP has changed since it was first announced, based on feedback from organizations like the Ontario Chamber of Commerce.
The announcement provided clarification on some of the OCC’s concerns. These include:
Implementation timelines. We learned that government will not extend ORPP implementation timelines, as we had asked. This will put pressure on both government and employers to meet the January 1st, 2017 implementation timeline, which we believe is very ambitious. These tight timelines necessitate increased collaboration between government and employers over the next 11 months.
A new funding policy. In the event that the ORPP becomes underfunded, there exists the potential for the ORPP Administration Corporation Board of Directors to increase contribution rates by up to 0.2 percent. The OCC had been seeking a guarantee that employer contribution would not exceed 1.9 percent and we will continue to lobby the government on this point.
A clearer definition of employment. Until yesterday, it was unclear what constituted an “Ontario employee.” This has now been defined. A person will be considered employed in Ontario if they report to work, full- or part-time, at an employer’s establishment in Ontario. This definition captures a greater number of businesses than many anticipated, including federally regulated businesses.
A streamlined comparability test. The government is establishing a comparability test that can be applied at the level of a subset of employees. This has important implications for those employers whose employees are not offered identical benefits. For example, some employers have different benefits for part-time and full-time employees. The government has indicated that this comparability test would streamline the administrative process of assessing plan comparability. The OCC looks forward to receiving greater detail on this comparability test.
Altogether, these points will lead to increased collaboration between government and employers over the next 11 months. The OCC intends to continue to work constructively to ensure businesses’ concerns are heard throughout this process.
Click here to view the government’s release.
Click here to view the government’s technical bulletin.