[TURC] Re: CCPA Ontario Submission on Ontario Pension Plan Discussion Paper
- From: Michael Mendelson <michael.mendelson@xxxxxxxxxxxx>
- To: "turc@xxxxxxxxxxxxx" <turc@xxxxxxxxxxxxx>
- Date: Fri, 13 Feb 2015 14:59:32 -0500
I am, no surprise, totally in favour of a compulsory universal contributory
plan, but what I notice is that no one, including the Ontario government, seems
to be addressing or even mentioning the tough questions about the ORPP.
A 'fully funded' ORPP would not come to maturity for thirty or forty years: do
current contributors get their pro-rated benefits which will be negligible for
at least the next decade and a half or more? Or do we do as the CPP did and
start paying full benefits to current contributors, thereby making the plan not
fully funded? But if the latter, how do we deal with portability from across
Canada (let alone immigrants from other countries)? What about disability
benefits?
If the plan is fully funded, it will eventually create a fund almost as large
as the CPP investment fund (by the way, it may come as a surprise to some but
the CPP is not fully funded - it has about four to five years funding on a
wind-up basis). How will the ORPP fund be managed? Will payouts be linked to
the fund performance? If not, how will deficits be treated, especially if they
are persistent - e.g. accumulating for several years? How will surpluses be
dealt with? Will the province of Ontario be able to borrow the money in the
fund in exchange for provincial bonds, as in the early days of the CPP? And I
might mention that a fully funded ORPP, if indeed fully funded, can be
discontinued by any future government without financial penalty.
I could go on and on but my bottom line is that an expansion of the current CPP
is much preferable and much more sensible. I support the Ontario government's
drive to resolve this problem despite the federal government but I remain
hopeful that it will never be necessary to implement. If there is some form of
Liberal/NDP majority governing through an accord or a coalition or whatever,
will a CPP expansion be on the agenda?
PS Could not the problem of extremely high effective marginal tax rates on ORPP
for low income seniors (the same problem as for the CPP) be solved by making
contributions on after tax income and benefits non-taxable income? I believe
that the province may have the authority to make its benefit payments
non-taxable by the federal government. I suppose this solution would be
politically impossible because people would balk at making after tax
contributions even if they were proportionally smaller, but it actually makes
little difference from a funding and net income for beneficiaries perspective
(except those with low incomes and the small effects of different before and
after retirement tax brackets).
Michael Mendelson 38 Avenue Road Suite 612 Toronto, Ontario M5R 2G2 Phone: 760
699 5415Cell: 416 579 9331
> Subject: [TURC] Re: CCPA Ontario Submission on Ontario Pension Plan
> Discussion Paper
> Date: Fri, 13 Feb 2015 13:08:41 -0500
> From: kjarvi@xxxxxxxx
> To: turc@xxxxxxxxxxxxx
>
> )^�� ��rGreat question, Andrew.
>
> My minimally-informed instinct is that given the obstacle at the federal
> level presented by the current government, it is helpful for leadership
> coming from any province. I would hope that any provincial plans would be
> designed in such a way that they could be folded into a future national
> pension plan, if we ever do get to the promised land. I'd love to get
> enlightened on the debate between targeting the province or the feds or both,
> if anyone cares to share.
>
> Take care,
>
> Kim
>
> -----Original Message-----
> From: turc-bounce@xxxxxxxxxxxxx [mailto:turc-bounce@xxxxxxxxxxxxx] On Behalf
> Of ajacksonclc@xxxxxxxxx
> Sent: Friday, February 13, 2015 12:01 PM
> To: turc@xxxxxxxxxxxxx
> Subject: [TURC] Re: CCPA Ontario Submission on Ontario Pension Plan
> Discussion Paper
>
> ** File was empty **
> Good paper. I wonder if CPP expansion is still the best option given that it
> is still in play in the run up to the federal election .... or at least has
> NDP support I think.
>
> Sent from my BlackBerry 10 smartphone on the Fido network.
> Original Message
> From: Sheila Block
> Sent: Friday, February 13, 2015 10:40 AM
> To: turc@xxxxxxxxxxxxx
> Reply To: turc@xxxxxxxxxxxxx
> Subject: [TURC] CCPA Ontario Submission on Ontario Pension Plan Discussion
> Paper
>
> ** File was empty **
> Hello All,
> Here is the link to our submission on the ORPP.
> If any of you are racing to meet the deadline, it might be helpful.
> https://www.policyalternatives.ca/publications/reports/getting-design-right-ontario-retirement-pension-plan-orpp
> Thanks
> Sheila
> Sheila Block
> Senior Economist
> Canadian Centre for Policy Alternatives Ontario Office
> sheila@xxxxxxxxxxxxxxxxxxxxx
> Twitter: @sheila_m_block
> Phone: 416-598-5982
>
>
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