The soon-to-be-implemented Ontario Retirement Pension Plan will be indexed to inflation, Premier Kathleen Wynne announced Tuesday during a news conference at a downtown Toronto cafe.
"I won't be premier when the young people who work here today retire, so it would've been easy to kick this decision down the road," Wynne said. "But that would be irresponsible."
Wynne said the Ontario Retirement Pension Plan, set to become a reality on Jan. 1, 2017, will eventually cover more than three million people who don't have a workplace pension plan.
She noted that if a worker who contributes to the plan dies before retirement, their surviving spouse or beneficiary will receive a lump sum payment equal to the value of the pension the worker had built up.
The premier, along with Finance Minister Charles Sousa and associate Finance Minister Mitzie Hunter, gave the details at Impact Kitchen on King Street East in Toronto.
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The premier said if a worker dies before retirement and they are part of the plan, their surviving spouse or beneficiary will receive a lump sum payment equal to the value of the pension — a measure currently excluded from the Canada Pension Plan (CPP).
Half a century ago, the CPP was first introduced by Lester Pearson's Liberal government. Wynne marked that anniversary by comparing her plans with those of Pearson's in 1965.
"The year I went into high school, the government decided this was an important thing to do — CPP," she said. "We have all benefited from their foresight. Fifty years later, it's time to look ahead again."
Wynne had mentioned retracting the provincial plan if the Liberals won the federal election and made good on their promise to boost CPP, but enhancement is not yet in the works, so the provincial government has decided to forge ahead with their own plan.
Wynne unveiled how the pension plan will work last August. It will eventually be mandatory for all Ontario workers whose employers do not provide a workplace pension plan, which amounts to roughly 3.5 million people.
Workers and their employers would each pay premiums of 1.9 per cent of salary, to a maximum of $1,643 a year. The maximum annual pension payout would be 15 per cent of a worker's salary, topping out at $12,815.
Companies with 500 or more employees will begin contributing on January 1, 2017. It begins in 2018 for medium-sized firms — those with 50-499 employees — and smaller companies will start in 2019.
Those details were revealed amid the heat of the federal election campaign. At the time, Wynne hinted she might cancel the provincial plan if the Trudeau Liberals were to form government and follow through on their promise to beef up CPP. But after federal Finance Minister Bill Morneau met his provincial counterparts last December, it emerged there will be no enhancements to CPP in 2016.