Pooled Registered Pension Plans Bill Passes in Ontario Legislature
Offering Ontarians A New Way to Save for Retirement
Ontario is moving forward with its plan to strengthen retirement income security for all, supporting a strong, prosperous economy.
The province has passed the Pooled Registered Pension Plans Act, 2015, which creates a framework for Ontario businesses to offer Pooled Registered Pension Plans (PRPPs) to their employees, as well as make PRPPs available to the self-employed. PRPPs offer a voluntary, low-cost, tax-assisted option to increase retirement savings.
Implementing PRPPs is one initiative under the government's commitment to strengthen retirement income security. Other initiatives include the creation of the Ontario Retirement Pension Plan and measures to help Ontarians obtain sound financial advice in managing retirement savings.
Making pension plans more accessible is part of the government's plan to build Ontario up. The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.
- Fewer than 35 per cent of workers, and only 28 per cent of private sector employees, in Ontario have a workplace pension plan.
- Studies show that many people are not saving enough to maintain a similar living standard in retirement.
- Participation in PRPPs is voluntary for employers. Where an employer elects to offer a PRPP to its employees, employees would be automatically enrolled into the PRPP, but would have the right to “opt out” of the plan within 60 days of receiving notice of membership.
- PRPPs are low-cost and professionally managed; they can move with an employee throughout their career.
- Ontario joins five other provinces that have passed legislation to implement PRPPs: British Columbia, Alberta, Saskatchewan, Quebec and Nova Scotia.
“After a lifetime of hard work, Ontarians deserve a secure retirement. The retirement savings challenge is complex, requiring a variety of tools to ensure a strong and stable retirement income system. Voluntary retirement savings mechanisms such as pooled registered pension plans are an important part of the savings toolbox. The actions we are taking now will enhance retirement savings for all Ontarians and strengthen our economic future.”