Page 6 - 2104 Ontario Budget - Introducing the Ontario Retirement Pension Plan
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THE ORPP WOULD Based on preliminary analysis using the CPP’s design and beneft structure, here’s what HELP FILL THE the Ontario Retirement Pension Plan would provide when combined with the CPP: UNDERSAVING • An individual with steady career earnings over 40 years of $52,500 — the maximum annual earnings covered by CPP — would replace about 40% of pre-retirement income and would receive an annual lifetime beneft of approximately $19,935. GAP • An individual with steady career earnings over 40 years of $90,000 — the maximum annual earnings threshold under the ORPP — would replace about 30% of pre-retirement income and would receive an annual lifetime beneft of about $25,275. Or roughly double the retirement beneft the individual would receive under the ORPP + CPP CPP alone. Benefts would be earned as contributions are made. This would ensure that the system is fair and that younger generations are not burdened with additional costs. TO START IN Because retirement income security is critically important to Ontario families, and 2017 for the future prosperity of our province, the government will make implementation a priority. The Ontario Retirement Pension Plan would be introduced in 2017, coinciding with expected reductions in Employment Insurance premiums for employers and employees. Employers and employees would enrol in the ORPP in stages, beginning with the EMPLOYERS AND EMPLOYEES WOULD largest employers. Contribution rates would be phased in over two years. ENROL IN THE ORPP IN STAGES, BEGINNING WITH THE LARGEST EMPLOYERS. CONTRIbUTION RATES WOULD bE PHASED Ontario will work with other provinces to examine whether the ORPP could be IN OVER TWO yEARS expanded to enhance the retirement income of those living outside Ontario. 5 ONTARIO RETIREMENT PENSION PLAN
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