The British Columbia government introduced legislation on February 28, 2013 that once passed will make Pooled Registered Pension Plans (“PRPPs”) available to employees in the province. Features of the PRPP structure that may offer significant appeal to B.C. employers include:
- Reduced administrative requirements – PRPPs will not be administered by B.C. employers, but rather by licensed entities, such as insurance companies
- Low-costs realized through the pooled nature of the investments and central administration
- Employer choices – PRPPs are not mandatory for B.C. employers, and once a PRPP is offered employer contributions are optional
- Tax advantages for employers that are not available for other forms of workplace retirement savings plans
- Employers not exposed to underfunding issues – the PRPP will function on a defined contribution basis, which limits employers’ funding obligations
- Recruitment and retention advantages of providing a new option for retirement savings
The PRPP legislation is aimed to enhance pension coverage in B.C., where according to the Ministry of Finance News Release, approximately two-thirds of the workforce has no access to a registered pension plan.
Information about the federal government’s rules regarding PRPPs can be found here.
FMC will continue to monitor the legislation and provide updates on the implementation of PRPPs in British Columbia and across Canada. For more information please contact Colin Galinski at 604-443-7133 or firstname.lastname@example.org.