Pooled pensions pushed by Ottawa

Changes will help pension plan sponsors better manage funding obligations: Finance minister
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 01/31/2011

While several provinces were hoping for an announcement about changes to the Canada Pension Plan, the federal government took a different route in late December by introducing pooled registered pension plans (PRPPs) to help address the country’s retirement income dilemma.

This type of plan will “provide Canadians with a new, low-cost, accessible vehicle to meet their retirement objectives,” said the government, and also be more attractive for employers, particularly smaller ones, because a third-party administrator would take on most of the responsibilities (such as management of the pension fund, day-to-day administration and offering appropriate investment options).

“Most, if not all, of the heavy lifting in terms of administration will be done by the service provider. So, right out of the gate, that will be very beneficial for a lot of employers who haven’t considered putting a plan in place to date,” said Bill Kyle, executive vice-president of wealth management at Great-West Life.