Canada’s retirement income system is recognized around the world as a model that succeeds in reducing poverty among Canadian seniors.
In recent years, our government has made it stronger with a range of measures to support the system.
Our government has built a better framework for federally regulated registered pension plans — including ensuring that an employer fully funds benefits if the pension plan is terminated.
Working with the provinces, we have also modernized the Canada Pension Plan (CPP), making it more flexible for those transitioning out of the workforce, to better reflect the way Canadians currently live, work, and retire.
Canada`s finance ministers recently announced a new type of broad-based, privately administered pension arrangement called the Pooled Registered Pension Plan (PRPP) in an effort to give all Canadians the ability to pay into a retirement plan.
PRPPs will allow many small business owners and their employees’ access to a large scale, low cost, private pension plan for the very first time. Professional administrators will assume a duty of care to ensure the funds are invested in the best interests of the plan members.
By pooling pension savings, PRPPs will offer Canadians greater purchasing power and basically, Canadians will be able to buy in bulk, giving the plan opportunity for greater returns, as well as lower administrative costs.
Sixty per cent of Canadians do not have a work place pension plan. This new opportunity will help Canadians build on their retirement needs in the future.
With a combination of a tax-free savings account, RRSPs, CPP, and now a personal PRPP, Canadians will be able to feel confident that when they retire they will be able to take care of their needs throughout their retirement years.
Once provinces put in place their side of the framework, PRPP can be fully operational. I know that many of the provinces are very eager for us to table federal legislation so they can begin work on their own legislation.
This decision has been built on months of cross-country consultation and will prove to be the way forward as Canadians plan for their retirement.
—Colin Mayes is the MP for Okanagan-Shuswap