At the December 2010 meeting of
federal and provincial finance ministers, there was unanimous agreement to
develop a framework for PRPPs to help fill in the gaps of the country's
existing retirement system. The federal framework, Bill C-25, the Pooled
Registered Pension Plans Act, received Royal Assent in late June.
"The concept of PRPPs was
introduced because the federal and provincial governments saw the need to make
low-cost pension plans available to Canadians who don't currently have access
to this type of retirement savings in their workplace, particularly employees
of small businesses and those who are self-employed," said Terry Campbell,
president of the CBA. "In the past, these groups have found that the
current options are too costly, administratively complex and contain some risks
that smaller employers are simply not prepared to take. We think that PRPPs
will break down those barriers."
Now that the federal framework is in
place, provincial and territorial governments must adopt legislation to make
PRPPs available in their provinces and territories, and to ensure that the
PRPP is a success. Quebec has already introduced a legislative framework for
its Voluntary Retirement Savings Plan but no other province or territory
has taken that step.
"We have had discussions with a
number of provinces about the importance of putting the necessary provincial
frameworks in place so that this type of low-cost workplace pension plan can be
made widely-available, and we have had some positive feedback," said Campbell.
"We are urging all provincial and territorial governments to quickly enact
legislation. While there may be interest in further discussions about other
issues related to Canadians' retirement savings, it is important that the PRPP
not get mired down in those deliberations and that Canadians can begin to
benefit from the PRPP."