a new Ontario pension plan: a plus, or not?

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a new Ontario pension plan: a plus, or not?



Would need to know a lot more about the possible benefits of a provincial pension plan alongside existing federal one, before signing on :



[...] the Liberals are also cognizant that requiring both workers and their employers to pay new premiums could easily be portrayed by their political opponents as a tax hike, from a government that is already under fire for misspending Ontarians money. Although the government has not yet graduated to the specifics of what the provincial plan would look like, insiders say that participation in it would almost certainly have to be mandatory rather than optional in order for it to achieve its intended purpose.

That would set it apart from a much smaller pension plan offered by Saskatchewan’s government, which is purely voluntary and is available to all Canadians – effectively functioning as a pooled registered pension plan (PRPP). Quebec also has its own pension plan, but that is instead of CPP rather than in addition to it.

In addition to whether Ontarians are prepared to make a mandatory investment, the Liberals are also grappling with their deficit-plagued government’s ability to afford it. While the pension fund would ultimately be filled by businesses and their employees, the start-up and administration would require some government spending. [...]


@ DaveW: if it's mandatory you won't get a choice about signing on.

A voluntary plan might possibly be saleable, especially if the fees are low.

This seems more designed to encourage the Feds to expand CPP than as a serious policy proposal. Of course, for that to happen enough provinces have to sign on.



Globe business writer chimes in :


This might just be an elaborate bluff by Ontario – leaking the possibility informally now as a means to both test public sentiment and put pressure on Ottawa. After all, government pensions have historically been Ottawa’s purview. As reluctant as the Harper government is to raise contributions for both workers and their employers in still-uncertain economic times (not to mention that many would perceive it as a de facto tax increase), it might be even more reluctant to start ceding oversight of the pension system to the provinces. Maybe the mere threat that Ontario would go its own way would shake Ottawa out of its slumber and create serious momentum on CPP reforms.

On the other hand, it’s not like there’s no precedent. Quebec has opted out of the CPP entirely, running its own provincial plan instead. (Saskatchewan also has its own plan on top of the CPP, but it is a voluntary plan.) And Ontario (as far as we know) isn’t talking about going the route of Quebec, which, given Ontario’s size, would pose a serious threat to the stability of the CPP. If Ontario wants to give its citizens some extra security without disrupting the existing CPP, and risk the wrath of voters, Ottawa might just let it.