An advisor says ORPPs have become the most important issues facing the industry, but advisors will have the opportunity to give their two cents during the consultation period.
The provincial government’s new retirement plan has leapfrogged rising drug benefits costs as the most pressing problem facing the industry, according to the President and CEO of Benefits Alliance.
“Right now, because it’s at the forefront, (the ORPP) is a bigger issue than the healthcare side,” said Wayne Farrow, President and CEO of Benefits Alliance Group. “The health care side of things has always been an issue. It’s been there for as long as I’ve been doing this.”
The CLHIA and the Ontario Chamber of Commerce have been among the growing number of voices calling for the provincial Liberals to proceed with caution with ORPPs.
“We’re not convinced that they know what they’re doing,” said Farrow. “We don’t have confidence that this has been well thought through.”
Fortunately, the government is giving advisors the opportunity to raise their concerns with the release of a consultation paper inviting feedback on key design details of the plan.
The province is seeking comments on essential components of the plan, including:
The opportunity for feedback should see advisors get answers to questions that have long worried them about the implementation of the plan, specifically with regards to how the ORPP will affect current plan members.
Critics fear adding payroll to small, and in some cases, large employers could cost jobs. “My personal impression of what the Liberals are trying to do is force the federal government to increase CPPs,” said Farrow.
Another issue that needs to be addressed is the demographics the government is targeting with the ORPP: young adults entering the workforce. “It’s a double edged sword,” said Farrow. “The provincial government is saying we have problems we’re going to fix, but we’re going to fix it by making employers pay 1.9 per cent and the employee pay 1.9 per cent. You’re telling a group of people who are saying they can’t afford to save for retirement, you’re forcing them to.”
The government would be better served attracting more business to Ontario – providing younger people more opportunities so they could save on their own terms. “Maybe if they were getting paid more they could afford to,” said Farrow. “If there were better opportunities for them, if the government spent more time looking at ways of attracting industry and lowering corporate tax rates, and doing things to attract businesses to come to Ontario that would probably solve it a lot better than forcing people to save who say they can’t afford to save.”
“Right now, because it’s at the forefront, (the ORPP) is a bigger issue than the healthcare side,” said Wayne Farrow, President and CEO of Benefits Alliance Group. “The health care side of things has always been an issue. It’s been there for as long as I’ve been doing this.”
The CLHIA and the Ontario Chamber of Commerce have been among the growing number of voices calling for the provincial Liberals to proceed with caution with ORPPs.
“We’re not convinced that they know what they’re doing,” said Farrow. “We don’t have confidence that this has been well thought through.”
Fortunately, the government is giving advisors the opportunity to raise their concerns with the release of a consultation paper inviting feedback on key design details of the plan.
The province is seeking comments on essential components of the plan, including:
- Defining a comparable workplace pension plan: Since the ORPP is intended to help those without workplace pensions, workers already participating in a comparable pension plan would not be required to enrol in the ORPP.
- A minimum earnings threshold: To reduce the burden on low-income workers, earnings below a certain threshold would be exempt from contributions, similar to the Canada Pension Plan (CPP).
- Supporting the self-employed: Since self-employed individuals have a unique status in the labour market as both employee and employer, the province is consulting on how to best assist them in saving for their retirement.
The opportunity for feedback should see advisors get answers to questions that have long worried them about the implementation of the plan, specifically with regards to how the ORPP will affect current plan members.
Critics fear adding payroll to small, and in some cases, large employers could cost jobs. “My personal impression of what the Liberals are trying to do is force the federal government to increase CPPs,” said Farrow.
Another issue that needs to be addressed is the demographics the government is targeting with the ORPP: young adults entering the workforce. “It’s a double edged sword,” said Farrow. “The provincial government is saying we have problems we’re going to fix, but we’re going to fix it by making employers pay 1.9 per cent and the employee pay 1.9 per cent. You’re telling a group of people who are saying they can’t afford to save for retirement, you’re forcing them to.”
The government would be better served attracting more business to Ontario – providing younger people more opportunities so they could save on their own terms. “Maybe if they were getting paid more they could afford to,” said Farrow. “If there were better opportunities for them, if the government spent more time looking at ways of attracting industry and lowering corporate tax rates, and doing things to attract businesses to come to Ontario that would probably solve it a lot better than forcing people to save who say they can’t afford to save.”
