The Investment Funds Industry of Canada (IFIC) is asking the Ontario government to scrap its Ontario Retirement Pension Plan (ORPP). IFIC claims that Pooled Registered Pension Plans (PRPP) would be better suited to deal with gaps in Ontario’s retirement savings framework.
In its submission to the Ontario Minister of Finance, IFIC points to a survey conducted by the Canadian Life and Health Insurance Association which found that 78% of the 401 employees who completed the online questionnaire believed their companies would be very (37%) or somewhat (41%) likely to reduce contributions under their existing workplace plan if they were required to participate in the ORPP.
"The ORPP, as proposed, would fundamentally disrupt the current system, causing particular harm to workers that already participate in workplace savings plans and voluntary retirement savings programs," says IFIC.
IFIC suggests that PRPPs could be adapted to promote savings and achieve the province’s public policy goals. For example, IFIC says the government could require employers with a certain number of employees to offer a group retirement savings plan in which employees would be automatically enrolled, employer contributions would be locked-in, and the withdrawal options for employees would be narrowly limited.
“However, should the government choose to proceed with the ORPP, at minimum, it must broaden its definition of “comparable” plan to capture all existing workplace savings plans, including Group RRSPs, DC pension plans, Pooled Registered Pension Plans (PRPPs), Deferred Profit Sharing Plans (DPSPs) and Group TFSAs,” comments Joanne De Laurentiis, IFIC president and CEO.