Ontario MPP Pay and Pensions Overhaul

Summary#

The MPP Pension and Compensation Act, 2025 amends the Legislative Assembly Act and the MPPs Pension Act, 1996. It removes a cap on MPP salaries, changes MPP pension arrangements, and allows the government to create pension supplements or allowances. The stated goal is to address pensions and compensation for members of the Assembly; that is a purpose, not a guaranteed result. The Act was passed and came into force on January 1, 2026, except for two salary provisions that took effect February 27, 2025.

  • MPPs cease to belong to the former pension plan and become members of the Public Service Pension Plan. Special vesting rules apply to members of the 44th Parliament.
  • The Lieutenant Governor in Council may establish a supplemental MPP pension plan and choose its administrator. If established, its initial terms must be substantially similar to terms in the Act.
  • The initial supplement terms include a pension formula, eligibility rules, reductions and inflation adjustments. Members do not have to contribute to that plan.
  • The Lieutenant Governor in Council may order allowances for current or former MPPs who are not eligible for the Public Service Pension Plan or an MPP supplemental plan.
  • The Act removes the statutory cap on MPP salaries and adds the Government House Leader to a salary provision at 19.2 per cent. It does not set a replacement salary amount for MPPs generally.

What it means for you#

  • Current and former MPPs: People leaving the former plan can choose how to use their registered plan account balance, including buying a pension or transferring funds to certain accounts or plans. If they make no choice, the balance is used to buy a pension. The Speaker had to provide each affected person a statement of their balance and options by February 1, 2026.
  • Current and future MPPs: They join the Public Service Pension Plan. A supplemental plan is possible, not automatic. Its initial terms provide for vesting after six years, a pension from age 55 if benefits are vested, and a pension based on 3 per cent of the highest average salary over 36 consecutive months multiplied by years of plan service, up to 35 years. Reductions and offsets can lower that amount.
  • MPP pensioners: Supplemental pensions must be adjusted for inflation in the same manner and at the same time as Public Service Pension Plan pensions. They are reduced for amounts payable under that plan or an applicable public-service supplemental plan for the same period of service. A pension may also be reduced while the person receives an MPP salary.
  • The Information and Privacy Commissioner and Ombudsman: They are treated as members of the Assembly for most purposes of the amended Act, but not for its new pension provisions.
  • The public: The Act does not directly change the pensions or salaries of the general public.

Money#

No cost information is in the available material. No publicly available information.

  • Employer payments required for MPPs under the pension plans are payable from the Consolidated Revenue Fund.
  • Any allowances ordered for ineligible current or former MPPs are also payable from that fund.
  • Supplemental-plan members do not have to contribute. The bill gives no estimate of employer costs, allowance costs, or the effect of removing the salary cap.

What is unclear#

  • The bill does not require the government to establish a supplemental pension plan. If one is established, an order names its administrator, but the bill does not set out the full plan terms.
  • The bill does not state the amount of any allowance, who would receive one, or how eligibility decisions would be made.
  • Orders establishing or administering a supplemental plan, and orders providing allowances, are exempt from Part III of the Legislation Act, 2006. The available material does not explain what other review or public process would apply.
  • The bill does not set a new general salary amount for MPPs. The parent Acts were not supplied, so the exact prior salary rules, the full effect of the 19.2 per cent provision, and the precise effect of the amendment to section 63 could not be checked against current law.

Case for#

  • A possible argument for the bill is that MPPs would join an existing public-service pension plan, while a supplemental plan could address differences in benefits for elected members.
  • The bill sets out important initial supplement terms, including vesting, pension eligibility, a formula, inflation adjustments and reductions for overlapping pension benefits.
  • Special vesting rules for members of the 44th Parliament provide a clear point when their Public Service Pension Plan benefits vest.
  • The option to order allowances could provide a way to support MPPs who are not eligible for either pension plan.

Case against#

  • One concern is that the supplemental plan could provide substantial pensions without member contributions, while the employer’s required payments come from public funds. The bill gives no cost estimate.
  • The plan’s formula and possible allowances may create long-term public costs, but the bill does not set out a funding estimate or a limit on allowance amounts.
  • The government may establish a supplemental plan by order, and the bill does not spell out the full terms or decision process. Some later benefit or contribution changes require consent from the Board of Internal Economy, but the bill does not explain other oversight.
  • Removing the salary cap without setting a replacement amount leaves the future level of general MPP salaries unclear.