Tuesday, November 17, 2015


The Ontario Retirement Pension Plan (ORPP) is a new government plan that is set to begin implementation January, 2017.   Designed to address the gaps in workplace pension coverage while providing a predictable source of retirement income for life, the ORPP aims to provide greater financial security for Ontario workers. More specifically, the ORPP will work towards supplementing those not covered by a Defined Contribution Registered Pension Plan (DC RPP) or a Defined Benefit Registered Pension Plan (DB RPP).  Participation in the ORPP will be mandatory for all employers and employees in Ontario, unless there is a "comparable" workplace plan already in place.

The following chart outlines the differences between the two types of pension plans. IF you don't already have an RPP we encourage you to take note of the benefits outlined below.

Definition of a comparable plan:
  • Provides people with a predictable stream of income for life
  • Provides people with security (they won't outlive their savings)
  • Requires contributions form employers to ensure fairness
  • Aims to replace up to 15% of a person's pre-retirement income
Comparable plans
  • DB - must match or exceed the benefit being offered through the ORPP
  • DB earning-based - must be at least 0.5% to be considered comparable
  • DC - most have a minimum total contribution of 8% of base salary earnings, employers required to contribute at least 50% of the total minimum
  • Hybrid plans - annual DB accrual rate of 0.5% plus annual DC contribution rate of 8% ≥ 1
  • Flat-Dollar/Flat-Benefit plans - will be assessed for comparability by expressing the benefit rate as a percentage of earnings.
Group RRSPs and DPSPs are not comparable plans

Have questions?  Need more clarification just reach out to your Continuum II advisor today and let us help you find the optimal solution for your business. 

For more information you can also visit the Ontario.ca website

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