What is an Alternative to the ORPP?

Articles What is an Alternative to the ORPP?

Is the Personal Pension Plan (PPP) a comparable alternative to the Ontario Retirement Pension Plan (ORPP)?

The short answer is YES. In August of this year the Ontario Ministry of Finance published a technical bulletin that describes ORPP-exempt “comparable plans”. The PPP is an ORPP exempt registered pension plan because, as a ‘hybrid’ plan, it meets the criteria for being a “comparable plan”1. In fact, the PPP is a superior alternative to the ORPP for two reasons: 1. The defined benefit component of the PPP is 4-times more generous than the minimum required ORPP exemption rate. 2. The PPP allows plan members to change from a traditional Defined Benefit (DB) to a Defined Contribution (DC) contribution method. Plan members can contribute as little as 1% of their T4 income to their pension plan and still meet the exemption requirements.

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