Late last year, the federal government released a framework for Pooled Registered Pension Plans (PRPPs) that would improve the range of retirement savings options for Canadians. The objective of introducing PRPPs is to make defined contribution pooled registered pension plans available across Canada, allowing more Canadians access to the benefits of a private pension plan.
Briefly, under the proposed framework, a financial institution would be allowed to administer a pooled pension fund. Members of the PRPP could participate by way of employment at a participating employer, as Employed Members, or as Individual Members. Individual Members could be employees of employers who do not offer a PRPP, or could be self-employed. The success of the plan for PRPPs is dependent on a high level of regulatory harmonization between provinces and with the federal government, as private pensions are primarily subject to provincial rather than federal laws. PRPPs are expected to provide an accessible and administratively low-cost retirement savings option for the self-employed and for small employers to offer their employees.
Federal, provincial and territorial officials are consulting with key stakeholders on the PRPP framework. We will provide you with more details about PRPPs when further developments are announced.
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