A new provincial pension plan for Ontario is one step closer to reality, as the legislation required to establish the proposed new public pension has passed.
The legislation, the Ontario Retirement Pension Plan Act, 2015 was approved by the provincial legislature on Wednesday. The new law underpins the proposed Ontario retirement pension plan (ORPP), which the government aims to launch by Jan. 1, 2017.
After failing in its efforts to convince the federal government to enhance the Canada Pension Plan (CPP), the provincial government is seeking to establish the ORPP to boost retirement incomes. The plan, which will require equal contributions from employers and employees, aims to replace 15% of individual earnings.
The government notes that two thirds of Ontario workers currently do not have a workplace pension plan, and that only about a quarter of younger workers are covered by these plans. As a result, it is seeking to launch a new public plan in order to bolster retirement security.
“After a lifetime of working and contributing to the economy, Ontarians deserve a secure retirement. We are working to strengthen the retirement income system in Ontario and will give the people of this province a predictable, lifelong stream of retirement income, while supporting the prosperity of the province as a whole,” said Mitzie Hunter, associate minister of finance, with responsibility for the ORPP.