Ontario Minister of Finance announced today a one-year delay for the first wave of the Ontario Retirement Pension Plan’s (ORPP) implementation which was originally staged to begin first with large corporations (500 or more employees in Ontario) in 2017. Medium–sized (50 to 499 employees) companies will still implemented the ORPP in 2018 and small business (less than 50 employees) will start in 2019.
As of January 1, 2017, large corporations will be required to register with the ORPP and will only have to remit premiums as of January 1, 2018. This delay in start dates by the government means both large and medium sized companies will start January 1, 2018 in making premium contributions.
RCC has actively been lobbying to delay implementation of the ORPP to allow businesses more time to prepare. This delay is a result of RCC’s efforts in this area and also addresses concerns raised by payroll processors that January 1, 2017 was even feasible given the extent of the systems changes that would have been required. The resulting delay should reduce duplication of effort and streamline the process for employers.
Please see the announcement for greater detail.
For all companies without a current pension plan in place, the ORPP will be phased-in over three years, with the start date varying depending upon the size of a business’ workforce.
Year One will require a contribution of 1.6% (0.8% employer/0.8% employee). Year Two will require a contribution of 3.2% (1.6% employer/1.6% employee). Year Three and all subsequent years will require a contribution of 3.8% (1.9% employer/1.9% employee).
The government will require companies with 500 or more employees in Ontario to begin premium contributions Year One on January 1, 2018 (with registration on January 1, 2017). Companies with 50-499 employees in Ontario will begin Year One on January 1, 2018. Companies with fewer than 50 employees in Ontario will begin Year One on January 1, 2019.
Companies with a current pension plan in place are not subject to the phase-in and will be required to ensure a contribution of 3.8% (1.9% employer/1.9% employee), effective January 1, 2020 or that their employees be enrolled in a “comparable” plan. This is irrespective of the size of the company’s workforce or the percentage of employees currently covered by their workplace pension plan(s).
If you have any questions or concerns, please don’t hesitate to contact: Gary Rygus, Director, Government Relations at: [email protected] or 416-467-3744