The Honourable Ted Menzies, Minister of State (Finance), announced that Bill C-25: the Pooled Registered Pension Plans Act will receive Royal Assent later today. The Minister joined representatives from the Canadian Federation of Independent Business (CFIB) and Jetstream Administration Inc. to celebrate this achievement. This legislation implements the federal framework for a new pension option for the millions of Canadians currently without access to a workplace pension plan.
“Today we are celebrating an important step towards offering a new, large-scale and low-cost pension option to employers, employees and the self-employed,” said Minister Menzies. “Once operational, Pooled Registered Pension Plans (PRPPs) will allow many small business owners and their employees to have access to such a plan for the very first time.”
“Saving for retirement is a real concern for small businesses, as close to 80 per cent have no company retirement plan for the business owner or their employees,” said Dan Kelly, President and Chief Executive Officer of the CFIB, who took part in today’s celebration. “PRPPs will be a welcome addition to the retirement savings toolkit as they are intended to be lower cost, free of payroll taxes and administratively simple.”
“This is an exciting opportunity for our company, and for the many small businesses that we work with, to implement a workplace pension plan,” said Jennifer Bauldic, President of Jetstream Administration Inc. “This will help us compete in attracting and retaining long-term employees.”
PRPPs will be available across Canada once federal tax legislation is passed and the provinces pass their enabling legislation. Regulations will soon be published to address provisions of the Pooled Registered Pension Plans Act.
“Because PRPPs will involve pooling large funds, Canadians will benefit from lower management costs,” said Minister Menzies. “In effect, Canadians will be buying in bulk, leaving more money in their pockets when they retire.”
Professional administrators will be subject to a fiduciary standard of care to ensure that funds are invested in the best interests of plan members. The organization of these plans will also be straightforward to allow for simple enrolment and management.
There was unanimous agreement at the December 2010 meeting of federal and provincial finance ministers to pursue a framework for PRPPs as an effective and appropriate way to help bridge existing gaps in the retirement system.
“Provinces can now easily and seamlessly use the federal legislation as a model to get their own side of the framework up and running,” said Minister Menzies. “And I urge all provinces to adopt PRPP legislation in the near term for the benefit of those Canadians currently without access to a workplace pension.”
For further information, media may contact:
Office of the Minister of State (Finance)
Department of Finance