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PRPPs Not Dead Yet – Saskatchewan Budget Indicates Legislation On Horizon

piggy bank surrounded by coinsSaskatchewan Finance Minister Ken Krawetz's 2013-2014 budget offered new hope for individuals, businesses and an eager financial services community looking for some good news related to Pooled Registered Pension Plans (PRPPs).

Minister Krawetz announced his government's intention to introduce PRPP legislation in 2013. Budget documents indicate the Saskatchewan legislation would not require employers to offer PRPPs, but where an employer chooses to adopt a PRPP for their organization, employees will be automatically enrolled but given the opportunity to opt out.

It had been a tough week for supporters of the federal government's PRPP initiative. Introduced in December 2010 with the support of provincial finance ministers, PRPPs were intended to provide a new lower cost, lower administrative burden retirement savings option for Canadian individuals and businesses. To date however, traction for PRPPs at the provincial level has been lacking.

Just last week, PRPP legislation died on the order paper in British Columbia. This was the second time PRPP legislation stalled at the provincial level in the lead-up to an election. Quebec's version of the PRPP, the voluntary retirement savings plan (VRSP), faced a similar situation when Bill 80 also failed to work its way through the Quebec legislature before the then-governing provincial Liberals were defeated in an election by the Parti Québécois.

Currently PRPP legislation, regulations, and tax rules are in force at the federal level. However, given pension regulation is primarily under provincial jurisdiction, each province must pass enabling legislation and update related regulations in order to make PRPPs available to employees, businesses, and the self-employed not covered by federal pension standards. To date, no province in Canada has completed these steps.

Given the next election in Saskatchewan isn't scheduled until November 2015, any eventual PRPP legislation slated for 2012 is unlikely to be de-railed due to election or change in government like in BC or Quebec.

The Red Lily province may be the first in the country to make PRPP's available to all business sectors and the self-employed. Looking to the horizon, the new PQ government in Quebec has also signaled its intentions to proceed with VRSPs and Alberta may be another province set to introduce pooled registered pension plan legislation in the months ahead.

Shawn Patton is a partner and senior consultant at Ampersand Advisory Group.

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