Manulife Financial is the latest organization to speak out in favour of Canada’s proposed pooled registered pension plan (PRPP) legislation.

“The…legislation is a big step towards improving the options many Canadians have to save for retirement and we are hopeful it will be passed by the House of Commons,” said Manulife Financial’s senior vice-president of group retirement solutions, Sue Reibel, in a release. “Governments have already put a lot of thought, effort and consultation into establishing their PRPP framework. The decisions provincial governments make about how to implement and manage PRPPs within their own jurisdiction will be just as important as the details of the federal government’s legislation.”

According to Industry Canada, almost 6.8 million Canadians were employed by small and medium-sized businesses in 2010, representing 64% of the total private sector labour force. However, administrative costs and regulatory complexity keep many of these businesses from offering pension plans to their employees, says Manulife.

Manulife’s 2011 Small Business Research Report found that 47% of small business owners have considered offering a group RRSP and 49% have considered offering an employee pension plan, yet less than one in five indicated they actually offer these options.

“For the first time in Canada’s history, PRPPs will allow millions of Canadians who work for small or medium-sized businesses to have access to a workplace pension plan to help them save for retirement,” said Reibel. “PRPPs target cost-efficiency and ease of implementation while…increasing Canadians’ access to workplace retirement savings plans.”

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

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Femi:

Manulife seems to state the real issue clearly in this article: “administrative costs and regulatory complexity keep many of these businesses from offering pension plans to their employees.” Why doesn’t the government make it easier for these businesses and other organizations to set up and manage pension plans? Also, all businesses, small or big already have to administer CPP contributions, so wouldn’t expending it be more cost-efficient than creating a new retirement saving outlet? I still don’t see how these arguments place the PRPP as a big step towards better retirement income security.

Friday, December 16 at 7:13 pm | Reply

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