Quebec is the only province to have mirrored the federal government’s move towards pooled registered pension plans (PPRPs). Immediately following the latest government election, the Quebec version was in question. But the new government party has announced plans to move ahead with the alternative savings system.
The federal government introduced PRPPs in 2011 as an “accessible, straightforward and administratively low-cost retirement savings option.” The voluntary retirement savings vehicle (which holds assets from multiple participating employers and from self-employed individuals who choose to participate) is intended to help those in the private sector with no employer-sponsored pension plan to save for retirement.
The framework for PRPPs was established by Bill C-25, the Pooled Registered Pension Plans Act, which received royal assent in June 2012. The federal government predicted that provinces would follow suit with similar systems for provincially-regulated employees. So far, however, provinces have been slow to embrace the PRPP model.
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So far, the only province that seems to have embraced the PRPP is Quebec, which proposed its own version of the design. Acting on a promise made in its 2011/12 Budget, Quebec introduced An Act Respecting Voluntary Retirement Savings Plans (Bill 80) in June 2012—before Bill C-25 received royal assent.
One reason Quebec jumped at the idea of a voluntary retirement savings plan (VRSP) is that it would help achieve a government policy objective to improve pension coverage across the province—without putting additional pressure on government and taxpayers.
While the proposed structure of the VRSP is similar to that of PRPPs, there are a few notable differences.
- The proposed VRSP would be required for employers with five or more employees in situations where no other retirement plan was offered. PRPPs are optional.
- Members of the proposed VRSP would be allowed to access employee contributions at any time. Under PRPPs, contributions are locked in.
Fast-forward a few months and the future of Quebec’s VRSPs was in doubt. Bill 80 died on the order paper last summer when the province’s former Liberal government called an election and was replaced by the Parti Québécois (PQ).
The new government’s recently released 2013 Budget document does state that the party “will table, by the spring of 2013, a bill to implement the new voluntary retirement savings plans.” The bill will reportedly reflect recommendations made by an expert committee, chaired by former Desjardins CEO Alban D’Amours, which is tasked with examining the future of retirement plans in the province.