Your ability to generate sales and revenue could be threatened at any moment with little to no advance warning. Your biggest risk is not being prepared! And it is time for Ontario employers to develop their strategy for the implementation of the ORPP!
We met in Belleville this month to discuss these hot topics. After a review of the ManufacturingGPS initiative, the Harvard Supervisory Certificate Program running again this April and a review of our Member Needs Help usage, we launched into the following presentations;
Business Continuity Planning (BCP)
Peter Bryant, Managing Partner with Jones Brown Inc presented to us the following 4 related sections and the key elements of a BCP.
- Aligning Risk Management plans with Strategic an Organizational Objectives
- The Value of Business Continuity Planning as part of the Overall Risk Management Plan
- Getting Started. Critical Questions
- The Key Elements of a Business Continuity Plan
The top risks today are;
- Reputation - Think Lance Armstrong and Tiger Woods for Nikey or a Manufacturer Recall
- Regulatory – Product Standards
- Supply Chain – The Mississippi river drought prevented supply barges from entering
- Cyber/Data Security – preventing a breach in your system
- People/Skilled Labour
- Political – political risk insurance policies
- Weather “Extreme” – ice storm of 2013, floods in Calgary etc.
*Risk Management is a Process!
Identification: With 4 areas being Strategic, Operational, Financial and Physical Hazards, what are your key risk drivers?
Assessment: Quantifying the risks from a cost standpoint, a time standpoint to determine loss of business income.
Controlling the Risk: Preparedness that could assist with successful continuity i.e.: insurance, relationships with restoration companies and claims adjusting firms, disaster recovery co-location, relations with law firms and public relations firms, alternative suppliers.
Some key points
- It is important to note that if an event has the potential to harm critical business processes it may be a risk.
- The key is to revisit your plan annually or when a change is added to a process, equipment, anything that could affect your top risks.
- The team should be cross-functional, including members from all aspects of the business.
- Gain buy-in regarding the value of business continuity planning
- The financial assessment is the key part of the Business Impact Analysis
- The plan cannot be static!
- Finance the Plan. The most important reason for failure – lack of funds to act on the plan.
Prepare, prepare, prepare! Engage Risk Management on an enterprise wide level. Plan for Business Continuity. Secure cash to pay for your BC Plan and Revisit your plan regularly.
ORPP: Ontario Retirement Pension Plan
David Wright, Sr. Vice President with APRI Insurance Services Inc. presented on ORPP.
What was set out as an election promise of Premiere Wynne, the ORPP aims to emulate the Canada Pension Plan. You may know this to be scheduled to come into effect on January 1, 2017 but this has recently delayed to January 1, 2018.
The ORPP will
- Be mandatory for Ontario employers except for employers with a ‘comparable’ workplace pension plan in place.
- Requires 1.9% contribution from both employer and employees (proposed phase in of contributions) – earnings above $90,000 are exempt.
- Target income replacement rate of 15%
- Contributions will be locked-in to retirement age
The big question is “What plans qualify as ‘comparable’?
The answer is; 2 types of plans can be considered ‘comparable’ to ORPP and exempt the participation of employers and employees:
- Defined Benefit Pension Plan (DBPP)
- Defined Contribution Pension Plan (DCPP) If the DCPP provides for;
- Total employee and employer contributions of at least 8%
- Total employer contribution of at least 50% of the total contribution or at least 4%
Group RRSP and DPSP are not comparable plans no matter the level of employer and employee contribution rates. Comparability test for PRPPs will be created but no details are available yet.
Employers have the following options;
- Make changes to their current plan to render it ‘comparable’ and exempt from ORPP.
- Participate in ORPP and keep offering their current plan, with or without changes to contributions or features.
- Participate in ORPP and discontinue their current plan.
Some companies will use their annual increases to fund the ORPP, therefore no raise as it goes to your ORPP plan. Some may start slowly upping their pension plans now in order to get to that comparable plan. Remember that you can change your plan with 90 days notice.
Regardless of what you decide to do – do this!
- Register online with their website to seek out regular updates on the ORPP
- Develop communication with your employees to educate them about the new ORPP and
- alternatives/solutions the company is considering.
We thank both Peter and David of Jones Brown www.jonesbrown.com for their presentations. Members can find the presentations on your Consortium Members Page.
If you would like to learn more about these topics for your Consortium reach out and we can try to schedule this into our Calendar!