New research raises significant concerns over viability of the ORPP going forward.
The ORPP might have the opposite effect than what the provincial government is intending, according to a new survey.
CLHIA President and CEO Frank Swedlove says the Environics survey shows that “the Ontario government's proposal threatens the viability of existing plans and could negatively impact the retirement savings of millions of Ontario workers."
The survey conducted on behalf of the CLHIA found of the 401 workplaces with Defined Contribution (DC) plans or Group Registered Retirement Savings Plans (GRRSP), more than three-quarters (78 per cent) of those surveyed were likely to reduce contributions under their existing workplace plan with the introduction of a mandatory ORPP.
Also, two-thirds (66 per cent) indicated that they would even consider eliminating their existing plans altogether.
This data follows a detailed analysis of retirement readiness released by McKinsey & Company, which found that 83 per cent of Canadian households are financially on track for retirement. McKinsey’s data shows that the problem of inadequate savings is limited largely to mid to high-income households that do not have an employer plan or do not make sufficient contributions to their plans.
"We strongly urge the Ontario government to consider the unintended consequences of their proposal," states Swedlove. "If you consider the Environics survey along with the McKinsey analysis, it is clear that the proposal, as it now stands, not only undermines existing retirement savings but would force additional contributions on a large segment of the population who are already on track for retirement."
CLHIA President and CEO Frank Swedlove says the Environics survey shows that “the Ontario government's proposal threatens the viability of existing plans and could negatively impact the retirement savings of millions of Ontario workers."
The survey conducted on behalf of the CLHIA found of the 401 workplaces with Defined Contribution (DC) plans or Group Registered Retirement Savings Plans (GRRSP), more than three-quarters (78 per cent) of those surveyed were likely to reduce contributions under their existing workplace plan with the introduction of a mandatory ORPP.
Also, two-thirds (66 per cent) indicated that they would even consider eliminating their existing plans altogether.
This data follows a detailed analysis of retirement readiness released by McKinsey & Company, which found that 83 per cent of Canadian households are financially on track for retirement. McKinsey’s data shows that the problem of inadequate savings is limited largely to mid to high-income households that do not have an employer plan or do not make sufficient contributions to their plans.
"We strongly urge the Ontario government to consider the unintended consequences of their proposal," states Swedlove. "If you consider the Environics survey along with the McKinsey analysis, it is clear that the proposal, as it now stands, not only undermines existing retirement savings but would force additional contributions on a large segment of the population who are already on track for retirement."
