Ontario MPP Pay and Pensions Overhaul

Summary#

Bill 34 changes how Ontario’s Members of Provincial Parliament (MPPs) are paid and how their pensions work. It lifts the long‑standing salary freeze, moves MPPs into the Ontario Public Service Pension Plan, and allows a new, employer‑paid supplemental pension for MPPs starting in 2026.

• Ends the 2009 salary freeze for MPPs (effective Feb. 27, 2025).
• Sets extra pay for the Government House Leader at 19.2% on top of the base MPP salary.
• Shuts down the old MPP pension/savings plan and moves MPPs into the Public Service Pension Plan on Jan. 1, 2026.
• Allows creation of an MPP supplemental pension with set starting rules: 3% per year of service (up to 35 years), earliest pension at age 55 if vested, indexed to inflation, coordinated with the main public service pension, and no member contributions to the supplemental plan.
• Gives current and former MPPs choices for what to do with their existing account balances (buy a pension, transfer to personal locked‑in accounts, move to another plan, or buy past service in the new plan).
• Permits special allowances for MPPs who are not eligible for these plans; these payments come from the province and are not counted as “salary” for public disclosure.

What it means for you#

• MPPs

  • From Jan. 1, 2026, you will be in the Ontario Public Service Pension Plan. A separate MPP supplemental pension can also be set up for you.
  • You will not have to pay into the supplemental plan; the employer (the province) funds it. The main public service plan has its own contribution rules.
  • You can qualify for a pension from the supplemental plan at age 55 if your benefits have vested. For most MPPs, vesting requires six years of service in the supplemental plan. Special vesting rules apply to members of the current (44th) Parliament.
  • Your supplemental pension is adjusted for inflation and coordinated with the main public service pension. If you start it before 65, it is reduced. It is also reduced at 65 to reflect Canada Pension Plan integration. It may be reduced while you are still drawing an MPP salary.
  • Your existing MPP plan balance (from the old plan) can be used to buy a pension, transferred to a locked‑in account, moved to another pension plan, or used to buy past service credit in the new public service plan. If you do nothing, the default is to use it to buy a pension. You should receive a statement of options by Feb. 1, 2026.

• Government House Leader (the MPP who manages the government’s day‑to‑day business in the Legislature)

  • Your role now receives an additional 19.2% of the base MPP salary.

• Taxpayers

  • The province will pay the employer’s share for the public service pension and any MPP supplemental pension. It may also pay allowances for those not eligible for these plans. These costs come from general revenues.
  • Lifting the salary freeze allows MPP salaries to rise above 2009 levels, which could increase payroll costs if salaries are set higher.

• Transparency watchers

  • Any allowances paid under this law are not counted as “salary” for the public sector salary disclosure list and will not appear there.
  • Changes to the supplemental pension’s benefits or member contribution rates after it is set up require consent from the Legislature’s Board of Internal Economy.

Expenses#

Estimated fiscal impact: likely increases provincial costs for MPP compensation and pensions; no official estimate provided in the bill.

• Employer pension costs: The province must fund the employer share of the Public Service Pension Plan for MPPs and fully fund the MPP supplemental pension.
• Member costs: MPPs do not contribute to the supplemental plan (employer‑paid); contribution rules for the main public service plan continue to apply.
• Allowances: Any allowances for ineligible MPPs or former MPPs are paid by the province.
• Salaries: Repealing the 2009 salary cap and setting a 19.2% top‑up for the Government House Leader increase potential compensation; the exact impact depends on salary levels set after the freeze.
• No publicly available information.

Proponents' View#

• Aligns MPP retirement with the broader public service plan, making benefits clearer and more stable.
• Restores a modern pension to help attract and retain qualified people to serve as MPPs.
• Ends an outdated salary freeze and updates pay for key legislative roles.
• Sets clear initial rules for the supplemental pension, including inflation protection and coordination with the main plan.
• Provides fair transition choices for existing MPP account balances.
• Requires consent from the Board of Internal Economy before changing benefits or member rates, which supporters say adds oversight and stability.

Opponents' View#

• Increases costs to taxpayers for salaries, pensions, and allowances without a published price tag.
• Lets politicians improve their own compensation, raising concerns about fairness and timing.
• The supplemental pension is employer‑paid, which critics say is too generous compared to many workers’ plans.
• Faster vesting for current MPPs and the ability to draw a pension while still serving (with reductions) may be seen as overly favorable.
• Some orders are not treated like normal regulations, and certain payments are excluded from the public salary disclosure list, which critics say reduces transparency.
• The Legislature’s internal board must approve changes to the supplemental plan, which some view as too much control by MPPs over their own benefits.