As reported in previous editions of
Pensions@Gowlings the federal government introduced legislation
in late 2011 to implement the federal portion of the Pooled
Registered Pension Plan ("PRPP")
framework. The federal government continued that process on
August 10, 2012 when it announced the August 11, 2012
pre-publication of proposed PRPP regulations (the
"PRPP Regulations") in the Canada
Gazette for a 30 day public comment period, prior to final
consideration by the Government.
The PRPP Regulations address provisions of the Pooled Registered
Pension Plans Act including:
Licensing conditions for PRPP administrators
Licensing applications must include a five year business plan
that includes reasons why the applicant believes its PRPPs will be
sustainable and a description of how the applicant intends to meet
the low cost requirement.
Management and investment of member accounts
The rules related to permitted investments are similar to those
under Schedule III to the Pension Benefits Standards Regulations,
1985 ("Schedule III"):
10% limit - imposed at the level of a member's account, on
investments in (or loans to) any one person, associated persons or
affiliated corporations. There are some exceptions, including
segregated, mutual or pooled funds that themselves meet the
investment restrictions under the PRPP Regulations.
30% limit - imposed at the level of a PRPP, on investing in
securities of a corporation to which are attached votes that may be
cast to elect directors of the corporation. There is an
exception to this rule for investments in real estate, resource or
investment corporations that comply with the rules applicable to
such corporations under Schedule III.
Related Party – prohibition on direct or indirect
loans to, investments in or transactions with a "related
party" as defined in the PRPP Regulations. There
are exceptions that permit a PRPP administrator to engage the
services of a related party for the operation or administration of
the PRPP and invest in securities of a related party (e.g. through
a fund that replicates the composition of a widely recognized index
of a broad class of securities traded at a marketplace).
The rules related to investment choices require that a PRPP have
a default option which applies if a member does not make an
investment choice within 60 days of receiving a notice of plan
membership. A default option must be either a balanced fund or
"a portfolio of investments that takes into account a
member's age". A PRPP administrator must not offer
more than 6 investment options (including a default
Criteria for assessing the low-cost criteria for PRPPs
The criteria for determining whether a PRPP is being offered to
members at low cost are:
(a) that costs are "at or below those incurred by members
of defined contribution plans that provide investment options to
groups of 500 or more members"; and
(b) the costs are the same for all members of the PRPP.
Conditions under which a PRPP member can set contribution rate
A member may elect a contribution rate of 0% if 12 months have
elapsed since the member's contributions to the PRPP
began. A member may elect a 0% rate for a period of 3 to 60
months and there is no limit on the number of times the rate may be
set at 0%.
Information to be disclosed to employers, plan members and the
The PRPP Regulations prescribe information to which
participating members and employers are entitled with respect to a
PRPP. Such information includes a description of each
investment option including its name, type of investment,
investment objective, asset allocation, top 10 holdings by market
value, costs, the degree of risk associated with the investment
option and its performance history.
A second package of regulations is to be published
"at the earliest opportunity" to address the transfer of
funds from a member's account, the manner and frequency of
remittances, the form and content of notices, locking-in rules,
variable payments, electronic communications, and other technical
rules related to the implementation of the framework.
CAPSA Defined Contribution Pension Plans Guideline
On July 13, 2012 the Canadian Association of Pension Supervisory
Authorities (CAPSA) published a draft Defined Contribution Pension Plans Guideline
for review and comment. CAPSA states that the publication is part
of its review of the regulation of defined contribution
(DC) pension plans which is intended to identify
areas where clearer distinctions between DC and defined benefit
plans may be appropriate, and to consider alternative approaches to
regulating DC plans based on such distinctions. The draft guideline
also is intended to supplement existing CAPSA guidelines related to
DC pension plans. The comment period expires on November 1,
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.
From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.
Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).