Winnipeg, Manitoba, November 23, 2012
The Honourable Ted Menzies, Minister of State (Finance), today spoke to the Winnipeg Chamber of Commerce about the role of private sector pension innovation in supporting a strong retirement income system for Canadians and about the importance of financial literacy.
“The Harper Government is acting in accord with the Organisation for Economic Co-operation and Development’s conclusion that a growing role for private pensions will be essential to closing the pension gap,” said Minister Menzies. “This gap is real. It is estimated that more than 60 per cent of Canadians do not have access to a workplace pension plan.”
The recent passage by the House of Commons of the federal Pooled Registered Pension Plan (PRPP) framework is an important step towards offering an innovative, new, low-cost private pension option to the millions of Canadians currently without access to a workplace pension plan, including employers, employees and the self-employed. Once operational, PRPPs will allow many small business owners and their employees to have access to such a plan for the very first time.
PRPPs are the result of federal and provincial governments working together to help ensure the long-term strength of Canada’s retirement system. There was unanimous agreement at the December 2010 meeting of federal and provincial finance ministers to pursue a framework for PRPPs as an effective and appropriate way to help bridge existing gaps in the retirement system.
PRPPs will involve pooling large funds, so that Canadians will benefit from lower management costs. In effect, Canadians will be buying in bulk, leaving more money in their pockets when they retire. PRPPs are also intended to be largely harmonized between provinces and territories, which will encourage lower administrative costs.
As November is Financial Literacy Month, Minister Menzies also addressed the importance of financial literacy.
“Financial literacy is a critical life skill in today’s economy, ensuring that individuals have the tools and knowledge to make responsible financial decisions,” said Minister Menzies. “The Financial Consumer Agency of Canada has effective resources available for Canadians looking to enhance their financial decision making.”
Office of the Minister of State (Finance)
Department of Finance