March 3, 2016

Pension Plan Updates

ORPP: Schedule of Effective Dates

The Ontario Retirement Pension Plan continues to be developed. The latest update provides more details about participation requirements and enrollment dates.

The ORPP requires all companies without a comparable pension to enroll with the ORPP. Enrollment will be done in waves based on the size of the company.

The definition of a “comparable plan” is all Defined Benefit (DB) and Defined Contribution (DC) Pension Plans that have a contribution rate of at least 8% of earnings with at least 4% of that being contributed by employers. Where a plan has different benefits based on class, the comparability test can be applied at the class level.

Full- and part-time workers aged 18-70 working at an establishment in Ontario or who are paid by an Ontario-based company must participate. There are some exemptions based on religious grounds and for First Nations members.

The total number of employees meeting this definition will be used to determine the employer size (and therefore effective dates) irrespective of a subset of the group participating in their own target benefit multi-employer pension plan (TB MEPP) (ex. union plan).

The table below illustrates the enrollment dates for the various waves and the contribution rate as the plan is phased in.

Table 1
Employer Size 2018 2019 2020 2021
50 + employees 0.8% 1.6% 1.9% 1.9%
Less than 50 employees 0% 0.8% 1.6% 1.9%
Employers with a registered pension plan that need to make modifications to meet “comparability test” 0% 0% 1.9% 1.9%

GMS continues to closely monitor developments in this area will provide updates accordingly.

Statement of Policies & Procedures

Pension plans must include a Statement of Policies & Procedures (SIPP) as part of their plan documents. New legislation requires federally registered, member directed DC pension plans (i.e. employee makes their own investment choices) to include a SIPP with the plan documentation. This must be filed by July 1, 2016.

Ontario recently made a similar change with SIPP & Form 14 filings required before March 1, 2016. If GMS Insurance is your pension plan advisor, you have already been contacted about this change in legislation and the appropriate filings have been made. If your plan is not with GMS Insurance and you have no knowledge about this requirement, please contact us immediately. We can help you get your plan compliant and avoid delinquent filing fees.

What is a SIPP?

The SIPP provides information to all stakeholders as to the investments available and the operation of the pension fund:

  • Information on the categories of investments and loans used by the fund;
  • Diversification of the investment portfolio;
  • Asset mix and rate of return expectations;
  • Liquidity of investments;
  • Whether environmental, social, and governance factors are considered and if so, how they are incorporated into the fund.

Who is the SIPP For?

The SIPP provides information to all stakeholders in the pension plan. It must be made available to all plan members and must be provided with annual statements to plan members and biennial statements to retired and former plan members.

Pension plans require diligence both in maintaining current administration records and making the appropriate filings. If you are ever in doubt about what is required of you and how to accomplish those tasks, contact GMS Insurance for assistance.


Pension Plan Audit

The mandatory SIPP and Form 14 review how an organization manages its pension plan. These documents help to ensure that a plan administrator is meeting its fiduciary responsibilities of:

  • Accurate record keeping
  • Plan offering management
  • Filings with relevant governing bodies (ex. FSCO)
  • Meeting CAP guidelines

A regular review of enrolment information such as addresses, dependents, and beneficiary information will also help to ensure that payment is not delayed or misdirected.


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