The Investment Funds Industry of Canada (IFIC) also made similar assertions last month in an article by WP.
“Ontario’s proposed PRPP framework follows the federal voluntary model; however, as other provinces have demonstrated, PRPPs easily can be easily adapted to achieve provincial public policy goals,” said CEO Joanne De Laurentiis, IFIC CEO and president, in the article.
“A well-constructed PRPP framework could directly address real gaps in retirement savings options currently available to employers and employees while avoiding the potential negative consequences posed by the ORPP.”
As opposed to what the Liberals are proposing, the PMAC instead prefers that the Province follows the lead of B.C. and Alberta by introducing pooled registered pension plans (PRPP). The plan would be low-cost and face less hurdles to implementation than the mandatory ORPP, according to PMAC.
The government has maintained that workplaces with defined benefit pension (DB) plans will not be required to provide the ORPP. However, this means that employers who provide defined contribution (DC) plans and group registered retirement savings plans would have to implement the ORPP.
“It’s going to be important for advisors to be able to illustrate to the client what potential income will be derived from their contributions,” said Birenbaum. “It’s not a panacea; it won’t bail out individuals who underfunded on their retirement savings overall.”