The Honourable Ted Menzies, Minister of State (Finance), today highlighted the role of private sector pension innovation in supporting a strong retirement income system for Canadians and promoted the importance of financial literacy to members of the Greater Saskatoon Chamber of Commerce.
“Our Government is committed to ensuring that Canada’s retirement income system remains effective and well-balanced in an ever-changing world that is full of challenges,” said Minister Menzies. “These challenges are real. It is estimated that more than 60 per cent of Canadians do not have access to a workplace pension plan.”
The recent passage by the House of Commons of the federal Pooled Registered Pension Plan (PRPP) framework is an important step towards offering an innovative, low-cost private pension option to the millions of Canadians currently without access to a workplace pension plan.
PRPPs are the result of federal and provincial governments working together to help ensure the long-term strength of Canada’s retirement system. 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.
PRPPs will involve pooling of large funds, so that Canadians will benefit from lower management costs. In effect, Canadians will be buying in bulk, leaving more money in their pockets when they retire. PRPPs are also intended to be largely harmonized between provinces and territories, which will encourage lower administrative costs.
As November is Financial Literacy Month, Minister Menzies also took the opportunity to highlight the importance of financial literacy.
“Financial literacy is about ensuring that individuals have the tools and knowledge to make responsible financial decisions,” said Minister Menzies. “The Financial Consumer Agency of Canada website is the go-to destination for all Canadians looking to enhance their financial decision making. Financial literacy enhances Canadians’ personal well-being and strengthens our financial system as a whole.”
