Ottawa, June 12, 2012
2012-067
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The Honourable Ted Menzies, Minister of State (Finance), today marked the passage through the House of Commons of Bill C-25: the Pooled Registered Pension Plans Act in Ottawa.
“The Harper Government is committed to helping Canadians save for retirement,” said Minister Menzies. “With today’s passage of the Pooled Registered Pension Plans Act, we have taken a positive step towards meeting our goal of offering better retirement savings options for Canadians.”
At the December 2010 meeting of Canada’s finance ministers, there was unanimous agreement to pursue a framework for Pooled Registered Pension Plans (PRPPs). PRPPs are an effective and appropriate way to help bridge the existing gaps in the retirement system and provide a viable retirement savings option for Canadians who currently do not have access to a workplace pension plan.
The PRPP framework will be fully in place across Canada once Senate approval and provincial enabling legislation occurs. Once operational, PRPPs will offer a new low-cost, easily accessible, privately administered pension option. They will be available to employees—with or without a participating employer—as well as the self-employed.
Under a PRPP, most of the administrative and legal burdens associated with a pension plan will be borne by a qualified third-party administrator. These licensed administrators will be subject to a fiduciary standard of care, which will ensure that funds are invested in the best interests of plan members. PRPPs will also promote pension coverage through automatic enrolment where an employer offers a PRPP.
“Since these plans will involve large pooled funds, plan members will also benefit from the lower investment management costs—in effect, Canadians will be buying in bulk,” said Minister Menzies. “Provinces can now easily and seamlessly use the federal legislation passed today as a model for their respective frameworks so that the system can get up and running for Canadians. It is my hope that all provinces will move to implement this viable low-cost pension option for hard-working families without delay.”
