Wynne to push Ontario pension plan

With a majority government — it seems clear Kathleen Wynne will use her activist agenda to push forward on her promise to create an Ontario Pension Plan.

This was one of Kathleen Wynne’s priorities before the election. And the Liberals say it’s a priority now that they’re back in power. We won’t see the details until the legislation is actually introduced. But the idea of the Ontario Retirement Pension Plan is just like the Canada Pension Plan. A little bit of financial pain now for a significant payoff later.

Marvin Ryder is with McMaster’s DeGroote School of Business: “I think most people see the wisdom of this. We would rather have people retire in a little more comfort and put that money aside now than to see the cheapest route, lets not take anything out, encourage you to save on your own when we know in fact people aren’t. What we’ve seen with the Canada Pension Plan is when we take that money out before you even see it, sort of the payroll deducation, people don’t seem to miss it, yet they get nicely surprised at the end with that cheque when they go to retire.”

Wynne says she’s concerned about too many people facing retirement without enough money. So under the plan she’s discussed so far, workers without an employer pension would pay 1.9 per cent of their pre-tax income into the plan. For someone making 45 thousand dollars a year that would be about 66 dollars a month. The payoff would be a possible maximum of about 534 dollars a month after 40 years of work. That would be along with Canada Pension and old age security. Professor Marvin Ryder of the DeGroote School of Business says people would be paying a little now — an amount that might not hurt too much — for a higher income on retirement.

Under the Ontario plan, employers would match the pension contributions employees make. Some small businesses have said that will hurt. But Ryder says they’re going to have lots of time to get used to the idea, and that some welcome the plan because it benefits their employees. And he says other provinces may join Ontario in this plan, meaning even more money to invest and a bigger payoff for everyone.