During the 2014 Ontario general election, it was our understanding that the proposed Ontario Retirement Pension Plan (ORPP) would be mandatory except for the self-employed, those already enrolled in workplace pension plans, and those in federally regulated industries, such as banking.
As the majority of DS Sector Agencies are already participating in Defined Contribution (DC) plans, OASIS believed that its members would not be impacted.
Whereas the government had previously announced that comparable plans would be exempt from participation in the ORPP, the ensuing consultation paper has stated the preferred option is not to provide an exemption for DC plans, group RRSPs, or pooled registered pension plans (PPRPs).
Currently, most of OASIS’ member agency employees are enrolled in DC plans, where the contribution rate is on average 3% employee/3% employer or greater. Many of these are group RRSP’s as they offer the best low cost administration expense and permit employees to make volunteer contributions to their overall maximum as well as being highly flexible with options for education and home ownership built in.
The Government of Ontario recently made great strides in addressing the crisis situation in the developmental services sector in the 2014 budget. It must not negate these gains by forcing additional, unexpected cost on the sector in the form of mandatory participation in the ORPP.
DS agencies cannot afford to contribute an additional payment of 1.9% of salary, nor can their employees afford this surprise cost.
It is our view that DC plans are indeed comparable in nature and should be exempted. However, if the Government of Ontario wishes to proceed under the current terms of the consultation paper, it must ensure that extra costs are reimbursed for the sector.
The Government of Ontario must agree to examine the ORPP’s impact on the DS sector holistically, and that means referring the terms of the pension plan to the Inter-Ministerial Committee on Developmental Services (IMCDS).
We strongly encourage all members to send your comments to Minister Hunter at ORPP@ontario.ca by February 13 about this crucial issue.
Also attached to this email is an example of correspondence already forwarded by OASIS as well as important documents that we have forwarded to provide context and background information.
OASIS VP Executive Director