What you need to know about the ORPP

Someone making $45K a year would contribute $2.16 daily



Online only.


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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4 comments on “What you need to know about the ORPP

  1. So I’m 57, and I pay in at full rate for 7 years at $1,710.– per year less $200.– handling fees for a total of $10,570.– plus the employer’s portion if I stay employed, then the government will give me $6,410.– per year for life. This will be an unfunded liability before the liberal are voted out of office. Here comes another billion dollar boondoggle.


    • The $6,410 quoted is the amount you would receive if you had contributed to the ORPP over the majority of your working life (the same example is on the actual ORPP website, and is for someone who contributed for approximately 40 years). Your seven years of contributions will not yield an ORPP payment of that size.


    • Contributing for 7 years will amount to a pittance cheque if anything.


  2. so i have to contribute at 56 1/2 to age 65 .. and i retire at 60.
    my contributions are minimal. will the gov. cut out 42% as they do with CPP …
    another question or scenario —
    I am 20 and contribute to 62 .. is there a cap .. do i have to wait to 65?
    alternatively, i get diagnosed with the big C at age 60, i am locked in to age 65 and because of the diagnosis I am not likely to make it to 62 … what then, can i withdraw my contributions plus interest ? what about the employers … do i get those or better yet do i get the $2500 death benefit … who gains here, obviously not me because i’m dead now, not my family or beneficaries .. oh yes, it would be the government or some senate delegate who does not even have to attend or meet any obligation other then collect a fat salary and over state their expenses.


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