The introduction of pooled registered pension plans (PRPPs) in Ontario could prevent an enhanced CPP from materializing, said a CUPE Ontario representative at the second day of public hearings on Tuesday.

“Our primary reason for opposing Bill 57 is that we believe it falls into the political trap set by Stephen Harper, whose government wants nothing more than to stop provincial efforts led by Ontario to expand the Canada Pension Plan,” said Wynne Hartviksen, executive assistant to the president of CUPE Ontario.

She also noted the current legislation doesn’t require obligatory employer contributions. For average working- and middle-class Canadians, Hartviksen said this likely wouldn’t result in contribution levels required to ensure retirement income security and wouldn’t be less likely to benefit workers.

Read: Industry shows support for PRPPs

“We also know that private investment vehicles like RRSPs and PRPPs have higher financial service costs and frankly seem designed to deliver investment returns into the hands of banks and the financial services industry rather than into workers’ pockets at retirement,” she explained.

Susan Eng, vice-president of advocacy with CARP, said making the PRPP mandatory would be beneficial.

“It should be mandatory in order to get the critical mass that’s going to be necessary to create a large enough plan to have economies of scale to bring down the costs as much as possible,” she explained.

Mandatory employer contributions would also make PRPPs more meaningful as Ontarians would be able to save more for retirement, Eng noted.

She also said ensuring there was a cap on fees would “give some comfort to a lot of people.”

Read: Ontario to hold PRPP hearings

Joe Nunes, president of Actuarial Solutions, expressed his concerns about the government’s strategy to consult with the pension industry about target benefit plans (TBPs) while also moving ahead with both PRPPs and the Ontario retirement pension plan (ORPP).

“There is no clarity within the industry on how all of these pieces are expected to fit together,” he said. “Plan sponsors have no sense of direction on what they should do to assist employees in securing an adequate retirement income.”

He also recommended that plan member participation should be mandatory once an employer offers a PRPP.

“Without mandatory participation we will be creating another separate program with partial participation, thus limiting the pooling of assets over which costs can be spread,” Nunes said.

Read: Ontario introduces ORPP, PRPP legislation

Others had more positive things to say about PRPPs.

Chris Donnelly, Manulife’s vice-president and counsel, industry, regulatory and government affairs, said PRPPs will help a number of workers.

“We believe that PRPPs have the ability to improve retirement income for millions of Canadians who do not currently have a plan and are therefore supportive of the bill,” he said.

He said PRPPs were designed with small employers in mind because of how easy they are to set up compared to a group retirement plan. Donnelly said an employer with 50 workers could go through the PRPP application process in 30 minutes.

The Ontario Chamber of Commerce also touted the benefits of PRPPs for small companies.

“The low administrative burden of PRPPs is really what makes them such an attractive option to employers,” said Scott Boutilier, a senior policy analyst with the organization.

He believes employees will also benefit from PRPPs.

“PRPPs are low-cost, flexible, professionally managed and transferable pension plans that will provide opportunities for Ontario workers, including the self-employed who don’t have access to any type of workplace plan currently,” Boutilier explained.

Copyright © 2020 Transcontinental Media G.P. Originally published on

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Doug Carey:

It appears that Wynne Hartviksen is seriously misinformed. The PRPP was designed to be a low cost savings vehicle. That is why it is POOLED. The design of the PRPP is to provide several small companies to offer their employees a savings vehicle that provides low costs to operate. I would really like to see the study she is referring to states “private investment vehicles like RRSPs and PRPPs have higher financial service costs and frankly seem designed to deliver investment returns into the hands of banks and the financial services industry” I suspect it is flawed. Small companies can’t afford the expenses of DB and DC pensions. The PRPP was also put into play long before discussions of the Ontario Government creating their own provincial pension plan (which will ultimately severely hurt the private sector and Ontario citizens)
I believe CUPE has been widely influenced by the Liberal government and vise-a-versa.

Friday, May 13 at 10:06 am | Reply

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