After a quarter-century of success, the Saskatchewan Pension Plan (SPP) may help plant the seed for Canadian pension reform. Benefits Canada talked to SPP general manager Katherine Strutt about how the SPP and PRPP can coexist.
Saskatchewan is known as Canada’s breadbasket, for its ability to consistently produce quality grain. But given that many in the industry have begun paying attention to what’s behind the Saskatchewan Pension Plan’s (SPP) 25 years of steady and reliable growth, the province may also one day be known as the root of Canada’s pension reform.
According to a new report by the C.D. Howe Institute, the government’s proposed pooled registered pension plans (PRPPs) are in need of a fix.
The federal government has released a package of draft legislative proposals for the Income Tax Act and Income Tax Regulations regarding pooled registered pension plans (PRPPs).
A group of pension experts, including a former chief actuary of the Canada Pension Plan, is calling on Canada's finance ministers to commit to expanding the CPP.
The federal government recently released Bill C-25, the Pooled Registered Pension Plans Act. This draft legislation is receiving praise for helping to close the pension gap—the gap between the level of income Canadians will have when they retire versus what they need or want to have. However, it is questionable how effective pooled registered pension plans (PRPPs) will actually be in closing this gap.
The last actuarial report on the Canada Pension Plan (CPP) estimated that 38% of Canadians in 2010 started receiving their CPP at age 60. Another 38% or so started their pension at 65. The remaining 24% started their CPP at other ages, mainly between 61 and 64. To someone new to Canada, the “normal” retirement age would not be at all obvious. Yet ask any Canadian and he or she will tell you that normal retirement means age 65.
On November 17, the Pooled Registered Pension Plan Act was tabled in the House of Commons. The explicitly stated purpose of the Act “is to provide a legal framework for the establishment and administration of a type of pension plan that is accessible to employees and self-employed persons and that pools the funds in members’ accounts to achieve lower costs in relation to investment management and plan administration.”
Canadian banks are opposing a push by OMERS to manage PRPPs, reports Bloomberg News.
The newly re-introduced Pooled Retirement Pension Plan (PRPP) may be touted as the cure-all for all Canada’s flailing retirement savings system, but a rather unimpressed advice industry regards it as just another tool.