Pooled Registered Pension Plans (PRPPs)

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Did you know?

60% of Canadians do not have a pension plan and that the current pool of CPP dollars is not enough to provide a pension for future retirees in Canada?

The Changes

The federal government recently introduced a framework for Pooled Registered Pension Plans (PRPPs).  The purpose of a PRPP is to provide employees and the self-employed access to a low-cost pension plan and retirement savings support.  With a pension plan, employees cannot generally withdraw the Pension funds until retirement.

Each employer, with likely 5 employees or more, will need to implement a PRPP.  However, most provinces haven’t yet defined what the details will look like (including BC).  We expect more details to follow later in 2012 and will keep you posted when we know more.

So far, we know that:

  • The employer will be required to set up a plan and make it available to employees to contribute via payroll deduction.
  • Employers may provide a fund match (but not mandatory) and will likely need to automatically enroll employees into the plan.
  • However, opt-out options will also likely be possible for each employee.

How ENCOMPASS Can Help

If an employer currently offers a Group RRSP or Pension Plan, they are fulfilling their obligation to provide a retirement vehicle for their employees; therefore, no further action will likely be required.

For those employers that do not currently have a group pension in place, ENCOMPASS vprovides several solutions to assist in meeting the upcoming obligations set forth by the federal and provincial governments.

We can help you to:

  • Analyze the needs of your organization regarding group retirement/pension plans;
  • Create goals for your group retirement plan;
  • Choose the right plan for your organization;
  • Choose the best provider from your needs;
  • Educate your employees about the group retirement vehicle you choose;
  • Assist with the ongoing management of your plan.

 

Our goal at ENCOMPASS is to ensure that you are receiving the best value and best service possible in regards to your employee benefits and group retirement plan.  Our many years of experience allow us to already know the best providers, current industry trends, and how to effectively accommodate these upcoming government regulations with minimal impact to your organization.

Time is of the essence.  With over 200,000 businesses likely to flood the market over a short window of time, we are encouraging our clients to start now simply to avoid the chaotic rush.  Let’s start early and take the appropriate time at each step to give your employees and administrative team a helpful solution.

Contact ENCOMPASS to get started!

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