Originally published in Blakes Bulletin on Pension &
Employee Benefits, December 2010
On December 15, 2010, Minister Flaherty released a backgrounder
entitled "Framework for Pooled Registered Pension Plans"
that is expected to be discussed at the December 19-20 meetings of
the Ministers of Finance and Treasurers. It proposes changes to
permit defined contribution Pooled Registered Pension Plans (PRPPs)
and includes the possibility of mandatory employer
To view a copy of Minister Flaherty's letter on this matter
and the government Backgrounder,
The main items discussed in the Backgrounder are as follows:
Eligible Administrators of the PRPPs will be regulated
financial institutions, including trust and insurance companies and
other financial institutions with a trust subsidiary.
The Administrator will have a fiduciary duty to plan
The PRPPs will have a suitable low-cost default investment
option for a broad group, and a manageable number of investment
options for members to choose from.
Administrators will be required to provide all members with
prescribed information on a regular, periodic basis.
There will be certain tasks that an employer that offers a PRPP
Employers may be permitted to enrol their employees into a PRPP
at any stage of their employment and there may be rights of an
employee to "opt out" shortly after enrolment.
The framework also provides that employers will have the
ability to increase the employee's default contribution rate
from time to time, potentially subject to a new "opt out"
Employer contributions will be locked-in with some
jurisdictions permitting what appears to be limited unlocking
Jurisdictions will make a determination as to whether to
require mandatory employer participation.
Employers contributing directly to a PRPP and their employees
will be permitted to make contributions under the RPP limits, with
the pension adjustment reporting. Self-employed persons and other
employees will contribute on the basis of their available RRSP
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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