The Ontario Retirement Pension Plan

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2 The discussion in regards to the Ontario Retirement Pension Plan can be one with much debate. Some would argue that what they would receive will not be enough in their savings to live off of, paired with ORPP. 1 Employees between the ages of 18 and 70, with the amendment from 18 to 19, are expected to make a contribution towards ORPP, but are only able to begin collecting their benefits once they have reached the age of 65. 2 The Canadian Ministry of Finance has conducted studies on ORPP, where it has been proven that ORPP is not enough to live off of, besides savings that have been accumulated over the years. While the ORPP is not a tax, the funds that are collected and further invested will be exclusively used for member 's…show more content…
Fair contributions to residents of Ontario and their pension is not being made, as well as the issues with low earners, who will have to pay a full ORPP premium for their earnings. This is because of income testing for their benefits. Under Ontario 's current system, expanded earning-related coverage for pensions is a bad deal for those who are low earners. 3 4 Statistics Canada has utilized a computer model for the purpose of gaining retirement readiness information from households. This model calculates the net replacement ratio, which is further compared with disposable income once the person has reached retirement, as well as preretirement. The replacement ratios for each household 's income is broken down, with a 75% rate being considered tolerable and low. The ideal rate, however, is above at least 95%. The small percentage of Canadians who have a readiness score that is under 75% are generally employees with a spotty employment record, or those who have not yet lived in Canada long enough for a full Old Age Security (OAS) and Guaranteed Income Supplement (GIS) benefit. Therefore, increasing the overall amount of household savings is going to do a lot more damage than good. This is because having savings now reduces all disposable income for the years that are spent working, while additional income for retirement that is generated will reduce the future GIS entitlement. In fact, the
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