Ottawa, December 14, 2012
Archived - Harper Government Takes Final Step in Development of Pooled Registered Pension Plans
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The Honourable Ted Menzies, Minister of State (Finance), today announced the coming into force of the second and final tranche of regulatory proposals to address provisions of the Pooled Registered Pension Plans Act. These regulations were pre-published in the Canada Gazette on October 27, 2012 for a 15-day public comment period, prior to final approval by the Government.
“This is the last package of regulations needed to complete the federal Pooled Registered Pension Plan (PRPP) framework, and it marks a significant milestone for Canada’s retirement income system,” said Minister Menzies. “With the federal framework now fully in force, our Government's efforts can serve as a model for provinces to implement their respective sides of the framework. I encourage them to do so, so PRPPs will become available to the millions of Canadians without access to a workplace pension option.”
The federal regulatory regime, which comes into force today, addresses provisions of the PRPP Act respecting:
- Licensing conditions for potential plan administrators that provide an additional level of protection to individuals and employers seeking to join a 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 flexibility to plan administrators to offer members investment options of varying degrees of risk and expected return;
- Limits on 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 per cent;
- 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;
- The withdrawal of funds from a member’s PRPP account;
- Variable payments from the funds in a member’s PRPP account;
- Transfer options available to members and the conditions on the vehicles to which a member’s funds may be transferred;
- Electronic means to satisfy requirements under the Act for communications with plan members; and
- Other technical rules related to the implementation of the framework.
“I would like to extend my sincerest thanks to the provincial-territorial officials who collaborated in the extensive review process, and who helped make the development of the federal PRPP framework possible,” said Minister Menzies. “I also extend my thanks to Canadians from across the country, including all the associations representing small businesses, employees, pension funds and financial institutions, who also took part in our consultations and helped ensure a sound regulatory framework for PRPPs.”
In addition, with the passage of the Jobs and Growth Act, 2012, which received Royal Assent today, the income tax rules for PRPPs are now in force. The tax rules for PRPPs will apply to both federally and provincially regulated PRPPs.
For further information, media may contact:
Office of the Minister of State (Finance)
Department of Finance