The federal government this morning introduced the much-anticipated Pooled Registered Pension Plans (PRPP) Act to address concerns over declining pension coverage for Canadians.

 The act incorporates changes to Canada’s pension landscape that will make saving for retirement easier for millions of Canadians, the government says.

“Today marks a major milestone in our efforts to ensure the ongoing strength of Canada’s retirement income system by providing a pension option for the many workers, who currently do not participate in a company pension plan,” said Ted Menzies, Minister of State (Finance). “Incredibly, just over 60% of Canadians do not have a workplace pension plan. Canadians work hard to realize their retirement dreams, and PRPPs will offer them a new, low-cost and accessible pension option to help meet their goals.”

PRPPs are the outcome of several years of co-operation, research and consultations by federal and provincial finance ministers on the best ways to ensure the long-term strength of Canada’s retirement income system.

“If you invest in a PRPP you will benefit from lower investment management costs associated with the large scale of these funds,” Menzies said. “Essentially, you will be buying in bulk. This will leave you with more cash in your pocket when you retire.”

Provincial enabling legislation will need to be introduced for the framework to become fully operational.

“Canadians want their governments to act on their priorities and deliver results on a timely basis, and the PRPP is a prime example of what we can accomplish for Canadians when governments work together,” said Christian Paradis, Minister of Industry. “The Government of Canada is therefore confident that the provincial side of the framework will soon be in place to help Canadians reach their retirement objectives.”

In addition, the tax rules for both federally and provincially regulated PRPPs, are being developed by the federal government.

PRPPs are a new type of broad-based privately administered pension arrangement. The plan addresses gaps in the existing retirement income system by providing a new, accessible, large-scale and low-cost defined contribution pension option to employers, employees and the self-employed.

This provides an attractive option to small business owners and their employees, who will not only have access to a low-cost pension plan with lower administrative costs, but will also have professional administrators working to ensure that funds are invested in the best interests of plan members.

These features will remove barriers that have kept many employers from offering pension plans to their employees and that, therefore, prevented employees from participating in large-scale pension plans.

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What’s wrong with expanding the CPP. It appears to have a very good track record.

Monday, May 28, 2012 at 9:19 pm Reply


I tend to agree that on the surface the PRPP may not seem to make a big difference in:
a) compelling an employer to offer a new “pension plan” b) impacting Canadian savings rates …. but look below the surface and more closely at the potential mechanics of PRPPs and reactions in group retirement industry and you might be pleasantly surprised.

Saturday, Nov 19, 2011 at 6:18 pm Reply


Things to look for as a result of PRPPs: a) downward pressure on Investment Management Fees b) reduced fiduciary risk and legal liability c) consultant and advisor community demonstrating ethics and integrity to advise existing plans of benefits, trade-offs of PRPPs vs. existing pension offering (PRPPs likely to feature much lower embedded compensation, so will be a real test)

Saturday, Nov 19, 2011 at 6:21 pm


Looking through eyes of employer PRPPs vs. Group RRSPs or other options MAY: a) be simpler to offer b) simpler to administer c) offer tax deductibility d) provide “safe harbour” protection e)vesting options to help with retention f) offer simpler investment options that feature lower investment management fees / MERs

Saturday, Nov 19, 2011 at 6:53 pm


I dont see how this is any more likely to encourage an employer to start up a plan. A lower MER is of little consequence, and every fund has professional administrators and investment management. Those werent barriers to saving. This wont make an employer decide to start one of these up tomorrow morning.

The barrier is how much it costs an employer to run it. If employers have to pay for this, I cant see it flying. If employers dont have to pay for this, then it really is a group RRSP which was mentioned in the comment above.

Thursday, Nov 17, 2011 at 6:49 pm Reply


Sounds like a Group RRSP, so I don’t see the benefit.

Thursday, Nov 17, 2011 at 2:06 pm Reply