In advance of Monday’s meeting of federal, provincial and territorial finance ministers, the Canadian Federation of Independent Business (CFIB) delivered a clear message: it’s time to implement voluntary PRPPs as the economy cannot afford a hike in CPP premiums.
“While we know some provinces are holding out for a CPP expansion, this is blocking progress to add an important retirement savings option for employees and owners of small businesses,” says CFIB president and CEO Dan Kelly. “Entrepreneurs can’t afford an across the board CPP premium hike, but many are interested in offering a pooled pension in their workplace.”
CFIB recently sent a letter to each of the provincial finance ministers, urging them to introduce enabling legislation to take advantage of the federal PRPP Act. In some cases, finance ministers were asked to reconsider their decisions to make PRPPs conditional on a CPP rate increase.
Read: Canadians prefer workplace pensions: Manulife
“As nearly 80% of small business owners do not have retirement plans in place for themselves or their employees, pooled pensions are just too important to be used as a political football,” Kelly says.
CFIB believes PRPPs are part of the solution because they offer lower fees than current retirement tools, reduce the administrative burden and exempt employer contributions from payroll taxes.
“I’m very encouraged by a recent CFIB survey which found that a third of small business owners said they would consider offering a PRPP in their business,” adds Kelly.
Read: Standard Life focuses on PRPPs
In a similar move, Standard Life has called on provincial and territorial finance ministers to support Pooled Registered Pension Plans (PRPPs) that will help Canadians save for a secure retirement.
Just ahead of the upcoming meeting of federal, provincial and territorial finance ministers in Ottawa on December 16 and 17, the company has sent individual letters encouraging each finance minister to support the federal government’s lead on PRPPs and adopt enabling legislation that will allow workers covered under provincial jurisdictions to participate in the program.
“The Government of Canada has done the right thing by adopting Bill C-25, the Pooled Registered Pension Plans Act,” says Charles Guay, president and chief executive officer, Standard Life. “Now that the federal legislation has passed, it is time for provinces to take leadership on this important initiative and adopt the PRPP framework that was agreed to in 2010.”
In order to ensure the plans will be as effective as possible and to maximize the greatest amount of participation by Canadians, the company also recommended to ministers that legislation be designed to include such measures as mandatory sponsorship and automatic enrollment, and that it be harmonized among the provinces.