Ottawa, October 24, 2012
Archived - Harper Government Finalizes Initial Tranche of Pooled Registered Pension Plans Regulations
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The Honourable Ted Menzies, Minister of State (Finance), announced that finalized regulations to address provisions of the Pooled Registered Pension Plans Act (Bill C-25) will be published in the Canada Gazette today. The regulations were pre-published in the Canada Gazette on August 11 for a 30-day public comment period prior to their final approval by the Government.
“These regulations, which were developed in close collaboration with provincial-territorial officials, are the outcome of extensive consultations with Canadians from across the country, including associations representing small businesses, employees, pension funds and financial institutions,” said Minister Menzies. “With these regulations now finalized, our Government has taken another important step towards offering a new large-scale and low-cost pension option.”
Specifically, today’s regulations address provisions of the Pooled Registered Pension Plans Act respecting:
- Licensing conditions for potential plan administrators that provide an additional level of protection to individuals and employers seeking to join a Pooled Registered Pension Plan (PRPP).
- Investment rules that provide minimum safeguards to protect plan members’ interests, as well as flexibility to plan administrators regarding the investment and management of plan members’ funds.
- Investment choices that provide enough flexibility to plan administrators to offer members investment options of varying degrees of risk and expected return.
- Inducements that plan administrators will be allowed to offer and employers will be allowed to accept.
- Low-cost criteria that provide a balance between flexibility, to ensure that competition and disclosure will drive down costs, and the provision of a transparent comparator to be used by administrators and the Superintendent of Financial Institutions to determine what constitutes low cost.
- The rights and obligations of plan members and plan administrators with respect to setting the contribution rate to 0%.
- Information that plan administrators must disclose to plan members, employers and the Superintendent of Financial Institutions in order to facilitate transparency and comparability across PRPPs and support informed decision making.
A second and final tranche of regulations under the Pooled Registered Pension Plans Act (PRPP Act) will follow at the earliest opportunity. Once the second tranche is finalized, the PRPP Act and regulations will be brought into force.
PRPPs will be available to millions of Canadians currently without a workplace pension plan once provinces implement their respective PRPP legislation.
For further information, media may contact:
Office of the Minister of State (Finance)
Department of Finance