The Ontario Retirement Pension Plan may stymie young workers who want to save for a home, says PMAC.
The portfolio managers’ association is asking the Ontario government to hold off on its planned provincial pension plan and try to work with the federal government to augment CPP. One of the reasons it doesn’t support a provincial plan is the unintended effect it will have on some workers.
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PMAC President Katie Walmsley says younger workers who want to buy a home may choose to lower their contribution levels to their employer plans — but if they drop them too much, and they’ll have to contribute to ORPP, blocking savings efforts.
Workers can be served by pooled retirement pension plans, and an Ontario plan would be redundant, Walmsley argues. PMAC represents more than 220 investment management firms. While Walmsley notes that some of her members work on public pension funds like the CPP, and would likely work on an ORPP, it doesn’t affect the association’s lack of support for the plan.
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“I think, in either of these solutions, assets are moving around,” she told Benefits Canada. “I think we’re probably one of the most agnostic groups in terms of which direction it goes.”
For more details, read Benefits Canada’s full story and Advisor’s story on PMAC’s list of federal budget recommendations.