Premier Kathleen Wynne dusted off her pension sales pitch Tuesday, saying people entering the workforce will be the biggest beneficiaries in an era with fewer and fewer company retirement plans.
“The working world has changed,” the premier said at an east-end coffee shop as her government released more details — including a clearer definition of which employees qualify — on the Ontario Retirement Pension Plan as first reported by the Toronto Star's Martin Regg Cohn.
While just over half of workers aged 45 to 55 now have workplace pensions, the percentage drops to 25 per cent for those aged 25 to 34, Wynne told reporters.
“It’s quite clear there’s a generational divide.”
The Ontario Chamber of Commerce said the government has clarified that any person who works full-time or part-time in Ontario and does not have a comparable company pension plan will have to enroll in the ORPP.
“This definition captures a greater number of businesses than many anticipated, including federally regulated businesses,” the chamber said in a statement that warned of “tight timelines” for employers to get ready for the plan taking effect next Jan. 1.
The chamber also sounded the alarm about the government decision to allow the plan to increase contribution rates by up to 0.2 per cent in the event it becomes underfunded — in addition to the 1.9 per cent contribution rate already set, a cap the business group had sought.
“We will continue to lobby the government on this point,” the statement added.
Some business groups have warned the contributions employers and employees must make to the plan will hurt profits and pocketbooks, becoming a drag on the economy.
Under the plan, benefits paid out in retirement would be indexed to inflation and there will be survivor benefits equal to 60 per cent to a spouse, with a lump sum going to the estate if the ORPP member dies before retirement.
“We’re sharing more details that employers have been asking for,” said Associate Minister of Finance Mitzie Hunter.
Given objections from some provinces to enhancing the Canada Pension Plan, an option she favoured, Wynne said she hopes that Ontario moving ahead with its own plan will set an example.
“I think it will move the discussion nationally,” she added. “We know the CPP enhancement is going to take a long time.”