Pension bill passes in legislature

The Ontario legislature passed the Pooled Registered Pension Plan (PRPP) bill.

The Ontario legislature passed the Pooled Registered Pension Plan (PRPP) bill.

The act that the province passed will create a framework for Ontario businesses to offer PRPPs to their employees, as well as make the plans available to the self-employed. PRPPs offer a voluntary, low-cost, tax-assisted option to increase retirement savings.

“After a lifetime of hard work, Ontarians deserve a secure retirement. The retirement savings challenge is complex, requiring a variety of tools to ensure a strong and stable retirement income system,” said Ontario Minister of Finance, Charles Sousa.

“Voluntary retirement savings mechanisms such as pooled registered pension plans are an important part of the savings toolbox. The actions we are taking now will enhance retirement savings for all Ontarians and strengthen our economic future.”

The implementation of the PRPP follows hot on the heels of the creation of the Ontario Retirement Pension Plan, as well as provincial plans to help Ontarians obtain sound financial advice in managing retirement savings.

Ontario joins five other provinces that have passed legislation to implement PRPPs: British Columbia, Alberta, Saskatchewan, Quebec and Nova Scotia.

Participation in PRPPs is voluntary for employers. Where an employer elects to offer a PRPP to its employees, employees would be automatically enrolled into the PRPP, but would have the right to “opt out” of the plan within 60 days of receiving notice of membership.

PRPPs are low-cost and professionally managed; they can move with an employee throughout their career.