Letter from Tom Reid: Ontario Government releases additional details about the Ontario Retirement Pension Plan

August 14, 2015

Dear Colleague,

On Tuesday, August 11th 2015, Ontario Premier Kathleen Wynne announced additional details regarding the design of the Ontario Retirement Pension Plan (ORPP), which is to take effect on January 1, 2017. Under the current design, the ORPP is to be mandatory for all employers (and employees), excepting only those employers whose workplace pension plans are deemed “comparable” to the ORPP and employees below a minimum earnings threshold (that remains to be finalized).

Among the details announced, the Ontario government has stated that a Defined Contribution (DC) pension plan will now be considered a “comparable plan” with respect to the ORPP, as long as the DC plan has a minimum total contribution of 8% of base salary earnings, with employers contributing at least 50% of the total minimum contribution (i.e. at least 4% of the 8% total minimum contribution). The new ORPP details do not consider Group Registered Retirement Savings Plans (Group RRSPs) and Deferred Profit Sharing Plans (DPSPs) to be “comparable” at this stage.

While we are encouraged to see the broader definition of comparable plans expanded, we also strongly believe more work needs to be in done in conjunction with the industry, our customers, the broader business / employer communities and the government. The current approach will still significantly impact many strong workplace Capital Accumulation Plans (CAPs) – hence employers and employees – in Ontario and nationally. Additional advocacy and engagement with the government are required to help influence and shape the details of the ORPP's design, and Sun Life will continue to strongly advocate for further refinement of what is a “comparable” plan, to include other workplace plans.

Earlier this year, Sun Life Financial called upon plan sponsors, advisors and CAP partners to contact the Ontario government with their feedback to help shape the design of the ORPP. We, along with many of you responded directly to the Ontario government's consultation paper to voice our concern about the gaps within and implications of the ORPP as it was presented, along with the Canadian Life and Health Insurance Association (CLHIA), other CAP providers in the industry and the broader business / employer communities.

While our collective voice was heard, the announcement by Premier Wynne reinforces our need to have continuing discussions with the Ontario government to refine the approach to minimize the overall impact so that collectively we can better support the retirement needs of Ontario workers and employers.

If you have any questions or comments about any details surrounding the ORPP, we'd appreciate hearing from you. Please email me or your Sun Life Client Relationship Executive. You can also find more details about the ORPP on the Ontario Ministry of Finance website.

In the meantime, we'll continue our communication with you in the coming weeks and months on our efforts and the impact of ORPP on your business.


Thomas G. Reid
Senior Vice-President, Group Retirement Services
Sun Life Financial