Pooled registered pension plan proposal

Pooled registered pension plan (PRPP) is the direction in which Canadians can expect to see the government heading. When the government finance ministers met at the end of January 2011 they were considering options for the self-employed and other workers who do not have a company pension plan.

In Canada 67% of the labor force do not have a corporate pension plan. So in putting this package together there will have to be consideration for whose income will be targeted for improvement; who will manage the plan; who takes the investment risk and will the participation by employers and employees be voluntary or mandatory?

As the baby boomers approach retirement age there is a huge concern about having enough money to live. The statistics show that just 55% of Canadians have Registered Retirement Savings Plans (RRSP) and only 5% of the allowable contribution room was used up as of 2008when the average annual contribution was $2,700.

There likely will be an impact on the employers' share of the CPP contributions if employers are required to participate in wider programs for the benefit of their employees.

Turners Tips will be updating this information as decisions are made.