In June OMERS provided information about the agreement in principle to enhance the Canada Pension Plan (CPP). At that time, we said that we would be updating our members, employers, sponsors and other stakeholders as more information became available.
On July 15, 2016, the federal government announced that eight provinces have formally approved the agreement in principle to expand the CPP. The government of British Columbia has delayed its formal approval pending public consultations. While the threshold of provincial support has not been met, federal Finance Minister Bill Morneau said the federal government still intends to introduce legislation on the enhancement in the fall, as previously planned. In addition, the Ontario government confirmed on July 28th that the ORPP will be officially cancelled with the repeal of legislation this fall.
The federal Department of Finance has also released additional information on the agreement, including the expected contribution rate increase starting on January 1, 2019, of:
The actual contribution rates will be confirmed in future
Although the OMERS plan benefit is integrated with the current CPP, the change in CPP does not directly impact OMERS plan benefit or contributions as it is currently contemplated administratively. The change in CPP will result in higher total (OMERS + CPP) contributions and higher combined pensions (OMERS + CPP).
OMERS has analyzed the effect of the CPP enhancement on OMERS members and employers, based on the understanding that:
Our analysis shows that:
At this point, no additional information has been provided on how the benefits will become effective. As more information is released, we will update our analysis and share it with you.