British Columbians will have an additional way to save money for retirement through Pooled Registered Pension Plans (PRPPs) that make well-regulated and low-cost pension plans available to the thousands of British Columbians who do not currently have access to pension plans, Finance Minister Michael de Jong announced today.
Nearly two-thirds of B.C. workers are without a registered pension plan. Removing the administrative burden of pension plans makes offering a pension plan more attractive and affordable for employers. Bill 9 re-introduces legislation that enables employees of small- and medium-sized businesses, as well as the self-employed, to join pension plans administered by regulated financial institutions.
Pensions are an important element of a family's retirement savings. B.C. recognizes the need for federal and provincial governments to find effective ways in which current workers can save for retirement. PRPPs would be an important option for people to save for retirement.
The B.C. government has worked with the federal and other provincial governments to develop the PRPP framework. B.C.'s legislation substantially adopts the federal legislation to ensure that B.C.'s participation in the PRPP framework does not impose unnecessary administrative burden.
Expanding pension plan options makes it easier for working families to save money. The provincial government believes that all British Columbians should be able to join a secure, regulated and affordable pension plan. This legislation enables any B.C. worker to join a PRPP, even if their employer does not set up a PRPP or if they are self-employed.
British Columbia is leading the way when it comes to PRPPs and retirement savings, and will be one of the first provinces to allow businesses to offer PRPPs to employees. Alberta and Saskatchewan also have enacted PRPP legislation, and Quebec has passed similar legislation-the Voluntary Retirement Savings Plans.
Minister of Finance Michael de Jong -
"Pooled Registered Pension Plans can help B.C. families save for retirement. Right now only one-third of British Columbians belong to a registered pension plan and PRPPs make retirement savings accessible for everyone."
"One of the great benefits of PRPPs is that they are so easy for employers to use. Employers don't have to deal with the administrative aspects of running a pension plan, and their contributions are optional."
- Providing PRPPs is voluntary and employer contributions are optional.
- If an employer offers a PRPP to employees, the employees will be automatically enrolled, but each employee has the right to opt out.
- Alberta and Saskatchewan have enacted similar PRPP legislation. Quebec also has enacted similar legislation allowing Voluntary Retirement Savings Plans.
Information from Finance Canada on PRPPs is available at: www.fin.gc.ca/act/prpp-prac/index-eng.asp
Canada Revenue Agency has up-to-date information on PRPPs at: www.cra-arc.gc.ca/tx/ndvdls/tpcs/prpp-rpac/menu-eng.html
Ministry of Finance