Canada’s financial services industry showed its support for Pooled Registered Pension Plans (PRPPs) at the first day of public hearings in Ontario on Monday.

“We believe that Bill 57 and PRPPs will help to close the pension gap and will make a fundamental difference to the retirement savings landscape for Ontario workers,” said Leslie Byrnes, vice-president, distribution and pensions with the Canadian Life and Health Insurance Association. She made the comments before the Standing Committee on Social Policy at Queen’s Park.

She urged the government to consider the universal access approach Quebec has taken with voluntary retirement savings plans (VRSPs). Employers with five or more employees in the province without a workplace retirement plan must offer a VRSP.

Read: Ontario to hold PRPP hearings

Byrnes also said if Ontario chooses not to recognize PRPPs as comparable plans for the purposes of the Ontario Retirement Pension Plan (ORPP), it could neutralize PRPPs before they get a chance to get off the ground.

“That would be a shame for Ontario workers without workplace plans,” she said.

Derrick March, vice-president, group retirement services with Sun Life Financial agreed that the success of PRPPs would be improved if they are considered a comparable plan under the ORPP legislation.

“If the two don’t harmonize in some way, shape or form—which we believe should be qualifying as a comparable plan—the PRPP mandate will be severely impaired,” he said.

Read: Ontario introduces ORPP, PRPP legislation

March noted PRPPs will make it easier for smaller employers to offer a workplace plan and the burden of plan administration would also be removed.

“By removing these barriers and risks from the small employer, PRPPs will help them attract and retain employees they need,” he said.

Marion Wrobel, vice-president, economic intelligence and emerging issues with the Canadian Bankers Association, also emphasized the importance of PRPPs for small- and medium-sized businesses (SMEs).

Read: Federally registered PRPPs now available

He said pension plans can be costly, complex and contain risks some employers aren’t prepared to take.

“Group RRSPs go part way to addressing these challenges but PRPPs take it one step further,” Wrobel said.

He added that banks are well-placed to deliver PRPPs to Canadians because of their relationships with more than one million SMEs.

“This broad reach ensures that the target market for PRPPs is developed quickly and cost-effectively,” explained Wrobel.

The second day of hearings is scheduled for Tuesday afternoon.

Looking for related articles? Read more stories about PRPPs.

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

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