Ontario Retirement Pension Plan (ORPP)

This fact sheet is provided as of April 1, 2016 based on current available information.

What is the ORPP?  The ORPP will be a Defined Benefit (DB) Pension Plan much like the Canada Pension Plan (CPP).  It will require both employees and employers to each contribute 1.9% of the employee’s salary for a total of 3.8%. o Contributions will be paid on earnings between $3,500 - $90,000.  40 years of contributions will provide approximately 15% of pre-retirement income in retirement.  ORPP benefit payments are expected to start in 2022.  Inflation protection will be provided.  Death benefits for survivors will be provided, including: o Lump sum payment to a beneficiary if death occurs before retirement; o If death occurs after retirement, then: . Spouse will receive a pension; . If there is no spouse and the retiree receives payment for less than 10 years, the balance will go to named beneficiary.  Workers will likely be able to “buyback” leaves of absences, though details are not yet available.

Who will have to join?  Anyone not a member of a “comparable workplace pension plan” will be required to join the ORPP.

What is a “comparable workplace pension plan”?

 The pension plan MUST be a “registered pension plan”.  A group RRSP will NOT be considered comparable, regardless of contribution levels.  All of OPSEU’s Jointly Sponsored Pension Plans will be considered “comparable” including:

CAAT HOOPP

OMERS OPSEU Pension Plan Pension Plan for the Employees of Pathways to Canadian Blood Services Pension Plan Independence

 Most other Defined Benefit pension plans will be considered comparable, however, check with your Staff Representative to confirm.  Defined Contribution pension plans, must have 8% in contributions (with at least 4% from the employer) to be considered “comparable”.

If you do not belong to a “comparable” pension plan you will be required to join the ORPP.

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 If you work for an employer that has a “comparable” pension plan, but you have not joined the plan, you will be required to join the ORPP. o For example, if you work at the LCBO as a casual, you can choose to join the OPSEU Pension Plan (OPTrust) but are not required to. If you do not join OPTrust, you will be required to enroll in the ORPP. o If your workplace pension plan has a waiting period before you can join, you will be required to enroll in the ORPP during the waiting period.

Group Registered Retirement Savings Plans (RRSPs) are not considered comparable workplace pension plans; therefore, if you contribute to a Group RRSP through your employer, you will also be required to join the ORPP.

When will I have to join the ORPP? The table below details the year in which you will start to contribute to the ORPP if you are not in a “comparable pension plan”, and how much you will be required to contribute.

Employee Contribution Rate* 2018 2019 2020 2021 Large Employers (>500 employees)** 0.8% 1.6% 1.9% 1.9% Medium Sized Employers** 0.8% 1.6% 1.9% 1.9% (50-499 employees) Small Sized Employers** 0.8% 1.6% 1.9% (<50 employees) Employees who have pension plans that are not considered “comparable” 1.9% 1.9% or who have not joined a “comparable” plan *Contribution will be matched by employer **If there is not a registered pension plan in place.  Contributions will start on January 1 of the year you are required to start contributing.

How will the ORPP help me in retirement?  If you contribute to the ORPP for 40 years the plan is designed to provide 15% of your pre-retirement yearly income in retirement.  Benefit payments for those who qualify will start in 2022 and continue for life.

For an estimate of the amount of pension you might receive from the ORPP, please visit the Government of Ontario’s website at: https://www.ontario.ca/page/orpp-ontario-retirement-pension-plan

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