The government of Alberta has introduced pooled registered pension plan (PRPP) legislation that will give Canadians access to a “viable, low-cost private pension option,” according to Minister of State (Finance) Ted Menzies.
Bill 18, the Pooled Registered Pension Plans Act, will allow employers, employees and the self-employed to access PRPPs. These large, defined contribution plans will be managed by plan providers, such as banks and insurance companies, and be open to any employer or individuals.
Only one in six Albertans working in the private sector participate in an employee pension plan, said associate minister of finance Kyle Fawcett.
“We’ve introduced this legislation so that all working Albertans — including those who work for small companies or are self-employed — have more choices when it comes to retirement savings.”
Pooled pension plans have low fees, meaning members will pay less for the management of their plan and, as a result, save more for their retirement, said the Albert government. And portability of the pension plans will allow members’ accumulated benefits to move with them from job to job.
PRPPs will be an excellent addition to the retirement savings options for small business owners and their employees, according to Richard Truscott, director of provincial affairs in Alberta for the Canadian Federation of Independent Business.
“Our members tell us one of the main reasons they do not have a company retirement plan for themselves and their employees is because of the high cost and administrative burden of offering a plan. Once properly implemented, we fully expect PRPPs to move the ball forward on both fronts.”
In early April, Saskatchewan also introduced legislation to implement PRPPs in the province. Legislation to bring these pension plans to British Columbia was put on hold when the province's legislative assembly adjourned March 14 — B.C. is holding a provincial election May 14. Quebec has also signalled its intention to pass similar legislation.
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