The Canadian Bankers Association (CBA) is calling on the provinces and territories to enact legislation that would provide access to pooled registered pension plans (PRPPs) for small businesses and the self-employed.
In a letter sent to premiers across the country this week, the group says that small and medium-sized enterprises and the self-employed face too many barriers that prevent them from offering pensions to employees, such as cost, administrative complexity and risk
And the letter clearly states that banks want a role to play in PRPPs. “Canada’s banks have well-developed relationships with almost 1.6 million small and medium-sized business as well as significant experience in financial and risk management, making them particularly well placed to design and administer PRPPs,” it says.
The idea of voluntary pooled pension plans as a solution for Canada’s pension woes has been floating around for a few years now. The government introduced it in 2010, federal legislation for PRPPs was tabled in November 2011, and Bill C-25, the Pooled Registered Pension Plans Act, received royal assent in June.
The CBA says that now that the federal framework is in place, provincial and territorial governments must adopt legislation to make PRPPs available in their provinces and territories.
Quebec has already introduced a legislative framework for its voluntary retirement savings plan, but no other province or territory has taken that step.
In fact, Ontario has even spoken out against PRPPs, saying that in their current form, they may simply replace one form of retirement coverage rather than increasing retirement savings for Canadians. The province has instead been pushing for an expanded CPP.
“We are urging all provincial and territorial governments to quickly enact legislation,” said Terry Campbell, president of the CBA. “While there may be interest in further discussions about other issues related to Canadians’ retirement savings, it is important that the PRPP not get mired down in those deliberations and that Canadians can begin to benefit from the PRPP.”