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Pooled Registered Pension Plans Launched in Canada

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The Canadian Department of Finance has authorized several Canadian life insurance companies to begin offering Pooled Registered Pension Plans in Canada. The new voluntary pension arrangements are intended to make it easier for small businesses, and even the self-employed, to participate in workplace pensions, complementing existing registered pension plans and individual savings vehicles such as RRSPs and TFSAs.

Additional Information:

Company: Ministery of Finance Canada
Website: http://www.fin.gc.ca/fin-eng.asp
Stock Symbol: NA
Date Published: Oct 10, 2014
Transcript: Available

Video Transcript:

I’m Samantha Deutscher for InvestmentPitch

The Canadian Department of Finance has authorized several Canadian life insurance companies to begin offering Pooled Registered Pension Plans in Canada.

The new voluntary pension arrangements are intended to make it easier for small businesses, and even the self-employed, to participate in workplace pensions, complementing existing registered pension plans and individual savings vehicles such as RRSPs and TFSAs.

Kevin Sorenson, Minister of State (Finance) stated: “This is a major milestone in providing an attractive new retirement savings option for Canadians who do not have access to a workplace pension plan. It is also a significant achievement in the Government’s ongoing efforts to strengthen Canada’s retirement income system.”

Initially PRPP’s are available to federally regulated employees only, such as banking, extra-provincial transport and aircraft transport.

Businesses and self-employed individuals in the Yukon, Northwest Territories and Nunavut are also eligible to participate.

The program is intended to be a framework for provinces that must enact their own legislation in order to offer a PRPP.

Just one province, Quebec, has created a similar scheme — coming into effect on July 1 — although others, such as Saskatchewan, British Columbia and Alberta, have legislation in the works and are expected to follow through at some point in the next year.

Nova Scotia, as well, has announced it will be considering legislation.

Ottawa says the cost of administering PRPPs will be spread over a large group of people, resulting in lower management costs.

To date, only Sun Life, Great West Life, Manulife, Standard Life and Industrial-Alliance have been registered as PRPP providers.

I’m Samantha Deutscher for InvestmentPitch
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This video is for information purposes only and it is not a recommendation to buy or sell any securities.