The Ontario Chamber of Commerce is calling on the provincial government to put off its plans for the Ontario Retirement Pension Plan (ORPP). The business group, which represents 160 chambers in Ontario, is concerned about the costs employers may be required to pay under the new pension system. For example, it says that the ORPP would require a business with ten employees who each earn $45,000 to pay almost $8,000 per year in pension contributions.
A survey conducted by the Chamber revealed that while 72% of businesses believe pension reform should be a government priority, only 23% said that they can afford the costs associated with increased employer pension contributions.
"Employers worry that by making it more expensive to hire, the new pension plan will negatively impact job creation and hurt Ontario's competitiveness," comments Ontario Chamber of Commerce president and CEO Allan O'Dette. "What will be the impact of a fully-implemented ORPP? What happens when a business can't afford to meet the requirements of the ORPP? How much will it cost to administer a standalone provincial plan? Businesses across Ontario are seeking answers to these questions."
The Ontario government introduced its ORPP legislation on Dec. 8. The pension plan will be mandatory in cases when the employee does not already have a comparable pension at work. The ORPP will come into effect in 2017, and will be managed by a third party agency.