The Government of British Columbia is introducing legislation for PRPPS.

If approved, it will be the first province to pass PRPP legislation following the Pooled Registered Pension Plans Act.

“We urge all provincial governments to follow B.C.’s lead since PRPPs will be an excellent addition to the retirement savings options for small business owners and their employees,” says CFIB president Dan Kelly.

Read: Offer staffers workplace pensions

Unlike company RRSPs, PRPPs aren’t subject to payroll taxes, and the administration fees are expected to be lower. This means small firms can set more money aside for employee retirement plans.

Recent CFIB member data reveals up to a third of small firms would consider offering a PRPP in their workplace to improve savings for employees.

Read: Reduce employees’ financial stress

Kelly adds the main reasons 80% of small firms don’t have any form of company retirement plan for the business owner or their employees is because the costs and administrative burdens of offering plans is too high.


Will PRPPs create opportunities for advisors?

PRPPs don’t undercut financial advice

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I dont agree that the costs (to a business owner) of retirement plans are too high. The cost of a defined benefit pension plan and the reporting and financial obligations are very high and this is the reason business owners dont offer them anymore. Defined contribution plans and group RRSPs are cheap, easy to set up and administer. As a matter of fact, PRPPs are pretty much exactly like group RRSPs. Granted, the MERs may be somewhat lower for the PARTICIPANTS, but that has nothing to do with the employer or what it would cost them to set up a plan. In the end, businesses will have to set these things up, enroll employees and do some form of administration. That is a cost many businesses dont need to deal with.

Are they a good thing overall? Anything that helps clients build up their financial worth is a good thing. Will it be good for small business? The jury is out on that one.

Friday, March 1 @ 6:02 pm //////

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