December 9, 2014
On December 8, 2014, Bill 56, the Ontario Retirement Pension Plan Act, 2014 was carried through its first reading.
Bill 56 requires the Ontario Government to establish a mandatory Ontario Retirement Pension Plan (the “Plan”) by January 1, 2017.
This is significant for both employers and employees who will be required to make contributions to the Plan. As the Bill currently reads, contribution amounts will be determined by applying the applicable contribution rate to the portion of an employees’ wages that are in between the maximum and minimum thresholds. It is expected that the maximum threshold for 2017 will be $90,000 and the maximum combined rate of employer and employee shall not exceed 3.8%.
The Bill provides for benefits to be paid beginning at age 65, although entitlement can begin as early as age 60 or as late as age 70 subject to actuarial adjustment.
Employers are defined broadly in the Bill and includes any person who is liable to pay salary, wages or other remuneration in relation to employment. Employees who are eligible for the Plan are:
The Plan will not apply to employees who participate in a “comparable workplace pension plan.” Unfortunately, the Bill does not define “comparable workplace pension plan.” Therefore, it is still uncertain whether the Plan will apply to employers who provide employees with RRSPs or if the exemption only applies to Employers that provide registered pension plans.
We will update Employers as this Bill moves through the legislative process. If you have any questions, please do not hesitate to contact a Mathews Dinsdale lawyer.
For more information on new developments in Workplace Law, please refer to our website at: http://www.mathewsdinsdale.com/news-events/in-a-flash/
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