Canada: The Ontario Retirement Pension Plan – More Details Released

As promised in its March 2016 budget, on April 14th, the Ontario government introduced Bill 186, the Ontario Retirement Pension Plan Act (Strengthening Retirement Security for Ontarians), 2016 (the "Bill" or the "Act"). The Bill sets out the key requirements of plan design, including participation, contributions, benefit types and plan sustainability. Many questions remain, however, as additional plan design details are to be addressed in regulations and future legislation.

In this communiqué, we provide an overview of some of the key elements of the Bill. For background information on the Ontario Retirement Pension Plan (the "ORPP") please refer to our January communiqué on The Ontario Retirement Pension Plan – An Update and our March communiqué on the  2016 Ontario Budget – Impact on Registered Pension Plans. We will also be discussing the Bill in further detail at our A.M. Pension session on May 31st.

The ORPP will apply to every Ontario employee who is not a member of a "comparable" workplace pension plan and will be phased in between January 1, 2018 and January 1, 2020. Employers who are otherwise not required to participate may also elect to "opt-in" to the ORPP. Participating employers and employees will be required to contribute an equal amount to the ORPP. The required contribution rate for both employees and employers will be 1.9% of an employee's annual earnings up to $90,000, subject to a minimum earnings threshold of $3,500. Prior to January 1, 2021, contributions will be phased in.

The Bill confirms much of what had previously been communicated by the Ontario government on the ORPP and provides further details on other matters, including:

Application of the ORPP: The ORPP will apply only in respect of "employment in Ontario." The Bill confirms that an employee will be considered to be employed in Ontario if: (a) the employee is required to report to work at an employer's establishment that is located in Ontario; or (b) if the employee is not required to report to work at an employer's establishment but the employee is paid from an Ontario based establishment.

Due to current federal income tax and pension rules, employees in federally regulated industries (e.g., banks, telecommunications, railways and air transportation) cannot participate in the ORPP. However, the Ontario government has indicated that it is in discussions with the federal government to include federally regulated employees as well as the self-employed in the ORPP. The Bill expressly excludes federal government employees from participation.

Individuals who object to participating in the ORPP on religious grounds will be entitled to apply to the ORPP Administration Corporation (the "ORPP AC"), the organization responsible for administering the ORPP,  for an exemption from participation.

Employees under age 18 and employees over the age of 70 will not be permitted to contribute to the ORPP. Employees who are receiving a pension under the ORPP will also not be permitted to contribute to the ORPP.

Employees who are on a leave that is protected under the Employment Standards Act, 2000 (e.g., maternity leave) will not be permitted to contribute to the ORPP unless they elect otherwise.

Comparable Plan: The Bill confirms the definition of "comparable plan" which was initially proposed by the Ontario government in August 2015. A defined benefit registered pension plan will be a "comparable" plan if it has a minimum accrual rate of 0.5% of a member's annual remuneration. A defined contribution registered pension plan will be a "comparable" plan if it provides a minimum total contribution of 8% of a member's annual remuneration, at least 4% of which must be employer contributions. An employee's voluntary contributions or employer's matching contributions to a defined contribution plan will not be taken into account in determining whether or not the plan is comparable. Other retirement savings plans commonly offered by employers, such as Group RRSPs or DPSPs, will not be considered comparable plans.

ORPP Pensions: ORPP members will be entitled to be paid a lifetime pension from the ORPP in equal monthly instalments. Members will accrue benefits under the ORPP at the rate of 0.375% of the member's pensionable earnings subject to prescribed indexing adjustments. Consistent with pension standards legislation, if a member has a spouse on the date of pension commencement, the pension will be paid as a 60% joint and survivor pension unless the member and spouse waive that entitlement. Also consistent with pension standards legislation, the Act allows a pension to be paid as a lump sum if a member has a shortened life expectancy or the pension is a "small" pension.

Money paid under the ORPP will be exempt from execution, seizure and attachment subject to some exceptions such as money payable in satisfaction of certain support orders, up to the limits set out under the Act. Provisions on division of payments under the ORPP on breakdown of a spousal relationship may be addressed in the regulations.

Employer duties: Employers will be required to deduct and remit contributions to the ORPP AC and to keep prescribed records. Employers may be subject to penalty for failure to remit contributions and other contraventions of the Act. The maximum penalty under the Act is a fine of $100,000 for the first conviction and a fine of $200,000 for each subsequent conviction. Directors and officers of corporations may be subject to the same penalties.

Plan Sustainability: The ORPP AC will be required to ensure that valuation reports for the ORPP are prepared by an independent actuary every three years. The Bill sets out a process for dealing with a funding excess or shortfall in the ORPP.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Borden Ladner Gervais LLP
Gowling WLG
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Blake, Cassels & Graydon LLP
Borden Ladner Gervais LLP
Gowling WLG
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions