Last week, Ontario’s ministry of finance announced new additions to its proposed Ontario Retirement Pension Plan (ORPP). Pending legislative approval, the provincial government would aim to enroll every employee in Ontario in the ORPP or a comparable workplace pension plan by 2020. Enrolment in the ORPP is expected to occur in four “waves,” detailed below:

1. First Wave – Begins January 1, 2017. Targets employers with 500+ employees and no workplace pension plan.
2. Second Wave – Begins January 1, 2018. Targets employers with 50-499 employees and no workplace pension plan.
3. Third Wave – Begins January 1, 2019. Targets employers with fewer than 50 employees and no workplace pension plan.
4. Fourth Wave – Begins January 1, 2020. Targets employers of any size with workplace pension plans that do not pass the province’s “comparability test.”

The “comparability test” outlines the province’s requirements for a workplace pension plan to be considered an adequate alternative to the ORPP. To pass the test, plans must include:

• A predictable stream of income in retirement for life
• Pooled longevity and investment risk to ensure people do not outlive their savings, and to protect savings in volatile markets
• Mandatory contributions from employers
• A target replacement rate of up to 15 per cent of an individual’s total earnings
• Mandatory “locked-in” contributions