Finance Minister Jim Flaherty has released (December 16, 2010) a draft framework for the creation of Pooled Registered Pension Plans (PRPP’s) to Provincial Finance Ministers. He proposes an all-new pension system in Canada aimed at helping small businesses and their employees who do not have corporate plans save for retirement.
The proposed PRPP is described in a nine-page draft report prepared by the federal Finance Department and released Thursday morning. It comes ahead of a Sunday and Monday gathering of federal, provincial and territorial finance ministers in Kananaskis, Alta. The new option would pool contributions from workers across multiple companies, or self employed workers who would otherwise not have access to a private defined-contribution pension plan. While each individual company would track their own retirement funds, the money would be pooled with contributions from other companies. That would allow small- and medium-sized companies to take advantage of the “economies of scale” investment advantages of large pension funds.
Below please find the the complete 9 page draft. Penad Pension Services will continue to monitor this as well as other proposed reform measures. If you have any questions please do not hesitate to contact us.