On the surface Ontario Retirement Pension Plan (ORPP) makes sense.  The workforce is getting older, and somehow more transient at the same time.  More workplaces don’t have a pension plan, or health benefits. One single full-time job is getting harder to find.  From that perspective, something needs to be done.

Add a dose of reality to it and it falls apart.  Under the ORPP employers will be required to contribute 1.9% to the plan, with employees doing the same.  For someone making $45000/ year it works out to $2.16/ day, and for someone making $90000 it works out to $4.50/day.  In an ideal world if you skip the trip to Starbucks, you’re good.

But it’s not ideal.  Everyone has rent or mortgage payments to pay, groceries to buy, car payments to make.  When you take into account these extra expenses, another $2.16/day might make the difference for some people between having a roof over their heads, and being homeless.  And that’s saying nothing of the deductions on a pay cheque which include C.P.P. and other tax-related deductions.

People can’t afford to save. Part of it is because of the deductions listed above, but the other is that the labour force has changed.  Nobody has the safe full-time decently paying job anymore.  The younger among us have multiple minimum wage  jobs if they can find work at all. Some save as and when they can, others have to choose between saving, and the food to feed a family.

The question of who this will cover remains to be answered.  Not all private sector workers will be covered; those with a comparable pension plan will be exempt.  What qualifies as a comparable pension plan?To make for the shortfall will the rest of us have to pay more?

What about the self-employed? A different answer to this appears every couple of days.  The Wynne Government says it needs changes to the income tax act for self-employed to contribute.  Other places say self-employed will  start contributing in 2019.  Four years, and one provincial election to figure this one out

How much will it cost to administer? Who will administer it? The Canada Pension Plan is administered by an independent body.  Some talk that OMERS, the body that looks after municipal pension plans will look after this one as well but nothing is confirmed yet.  It’s irresponsible to introduce something like this and not have a basic idea of how it will cost.

Too many questions to be answered.  People would be better off saving for themselves as they can than relying on being covered by a patchwork pension plan.

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