The federal government’s December 2010 announcement of the pooled retirement pension plan (PRPP) arrangement has been the most significant piece of pension reform introduced in Canada since discussion on the topic increased following the 2008 economic crisis, according to a panel speaking at the Benefits & Pension Summit today in Toronto.
Canadians will have to wait until legislation supporting PRPPs is introduced before full details are understood, but Quebec’s unveiling of its voluntary retirement savings plan (VRSP) in its 2011 budget included important details that should be matched by other provinces, said panelists Tina Di Vito, director of retirement solutions with BMO’s Retirement Market Group, Greg Heise, partner at Morneau Shepell, and Frank Swedlove, president of the Canadian Life and Health Insurance Association. The panel said Quebec government’s decision to make it mandatory for employers in the province to offer a VRSP and for employees to be auto-enrolled into the plans will result in a high level of participation and greatly increase the potential for subsequent saving.
As other provinces begin offering PRPPs, harmonization will also be important, to ensure Canadians have a retirement savings vehicle that is portable from employer to employer and province to province.