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.”