On June 20, 2016, the federal and provincial Ministers of Finance announced an agreement in principle to enhance the Canada Pension Plan. At the same time, Ontario Finance Minister Charles Sousa announced the Ontario Retirement Pension Plan will not proceed.
The agreement, which begins a seven-year phase-in on January 1, 2019, provides:
The announcement did not identify the contribution rate increases required to fund the increased benefit. However, federal Finance Minister Bill Morneau announced two measures intended to address the cost of the enhancement:
OMERS will continue to conduct analysis as more information about the agreement becomes available.
At this point, we know the following:
1. There will be no impact before 2019
2. Changes will be phased-in over seven years
3. The upper earnings limit of $82,700 will be phased-in over two years, 2024 and 2025
We will continue to update our members, employers, sponsors and other stakeholders as more details become available.