What you need to know about the ORPP

TORONTO – Some key facts and figures about the Ontario Retirement Pension Plan, the details of which the province’s Liberal government announced Tuesday:

— It aims to replace 15 per cent of an employee’s earnings.

— A person making $45,000 a year would contribute $2.16 a day, as would the employer, which would leave the employee with $6,410 per year for life.

— The government has not yet established minimum pensionable earnings, but the maximum is $90,000. That’s compared to $3,500 minimum earnings and $53,600 maximum for the Canada Pension Plan.

— Employers and employees with a comparable plan won’t have to enrol in the ORPP.

— Employees between the ages of 18 and 70 qualify, but can only start collecting benefits at age 65.

— Defined benefit plans are considered comparable with a minimum benefit accrual rate of 0.5 per cent.

— Defined contribution plans are defined as comparable with a minimum annual contribution rate of eight per cent and employers must match at least 50 per cent.

— Self-employed people can’t take part in the ORPP, as the federal Income Tax Act doesn’t allow the self-employed to participate in registered pension plans.

— Large employers (with 500 or more employees) without registered workplace pension plans start contributions Jan. 1, 2017. Medium employers (with 50-499 employees) without registered workplace pension plans start contributions Jan. 1, 2018. Small employers (with 50 or fewer employees) without workplace pension plans start contributions Jan. 1, 2019.

— Employers that already have pension plans but that aren’t comparable to the ORPP have to start contributions Jan. 1, 2020.

— Contributions will be phased in, starting with 0.8 per cent each from employers and employees, and reaching 1.9 per cent each by 2021.

— Benefits will be paid starting in 2022.

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