"The federal government's PRPP 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," noted Sue Reibel, Senior Vice President of Manulife Financial's Group Retirement Solutions.
"Governments have already put a lot of thought, effort and consultation into establishing their PRPP framework.
Next week's finance minister's meeting is another important step towards increasing access to workplace retirement savings for millions of Canadians."
Pension and employment standards fall largely into provincial jurisdiction, meaning each provincial government will need to determine how PRPPs are implemented and managed.
"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," Ms. Reibel
"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 Ms. Reibel
"Access to this kind of retirement savings plan will allow small business owners to take care of their employees the way we know they want to, while at the same time attracting new talent and retaining many of their best employees."
Under the PRPP system currently proposed, employers would not be obligated to contribute to the PRPP; however, employers who do contribute will retain the flexibility to change contribution levels.
A simple process plus a cost-effective model will be central to the successful implementation of PRPPs.
"Small and medium sized business owners will play a vital role in implementing PRPPs and we need to make sure governments design them in a way that won't over-burden business owners with additional costs or administrative requirements," said Ms. Reibel
"That leaves a considerable number of people without access to a workplace retirement savings plan," concluded Ms. Reibel
, "This limited access for millions of Canadians is particularly worrisome because so many of us are approaching retirement age.