Ontario halts pension work with CPP deal looming

Ontario hits “pause” button on provincial pension plan as critics fume 50 staffers are now “twiddling their thumbs.”

Thestar.com
June 22, 2016
By Rob Ferguson

Staff at the soon-to-be-disbanded Ontario Retirement Pension Plan have hit the “pause” button on implementing the retirement scheme while critics fume they are “twiddling their thumbs” at taxpayers’ expense.

Finance Minister Charles Sousa said the halt comes as Ontario and most other provinces face a July 15 deadline to approve a provisional deal reached Monday to improve Canada Pension Plan payouts for retirees.

“We’re working now to put a pause on all activity,” Sousa told reporters Wednesday, noting the ORPP will not proceed with its most costly step - hiring a company to administer the plan.

Officials will be meeting “in short order” to decide how to close out the ORPP and staff will have to stay on to handle those duties, Sousa said.

“That’s what we’re working on,” he added, correcting earlier statements from his associate minister Indira Naidoo-Harris that implementation was proceeding in case the CPP deal falls through.

Progressive Conservative MPP Julia Munro said a contingency plan should already be in place because the government had long hoped its Ontario pension plan push would prompt other provinces to back an enhanced CPP.

“Fifty employees, including (chief executive officer) Saad Rafi and his $525,000-a-year salary, will spend an undetermined amount of time twiddling their thumbs in their offices,” warned Munro (York-Simcoe).

“Ontario has already sunk at least $14 million into the ORPP. This does not include severance payments that may be awarded to employees.”

Neither Sousa, Naidoo-Harris, nor ORPP spokeswoman Neala Barton could answer questions about what severance arrangements are in place.

Sousa said staff cannot just be given pink slips because they have employment contracts that must be honoured. About 40 employees have been hired with another 10 seconded from government ministries.

“We will do this in a way that’s responsible for everyone,” Naidoo-Harris said later, noting that “flexibility” was an issue in contracts given the government knew its pension plan might not be needed.

“We are dealing with people and we’re dealing with sensitivities in terms of themselves and their futures and we have to make sure that we’re taking all those things into account.”

Munro said she fears severance costs will skyrocket because the Liberal government has “no respect for the taxpayer.”

Barton insisted the pause in implementing the ORPP will “minimize all costs” and said the corporation set up to administer the plan “is in the process of assessing its commitments and contractual obligations.”

The government has defended the expenses of setting up the plan, saying it signalled Ontario’s determination to other provinces and led to the CPP deal that will benefit workers across the country.

That work has included hiring pension experts to work with payroll providers and 450,000 businesses to determine which ones would have to enroll in the ORPP, intended for workers who did not have a pension plan at work.

“In order to begin collecting contributions in 2018, significant work was required,” Barton wrote in an email.

Under the CPP deal reached Monday, premiums for employers and employees will begin to rise in 2019 - a year after the ORPP was to start.

Benefits under the national plan will eventually rise to $17,478 a year from $13,110 now.