Financial Planning -> Pensions -> Registered Pension Plans (RPPs) -> Pooled Registered Pension Plans (PRPPs)

Pooled Registered Pension Plans (PRPPs)

Federal, provincial and territorial governments are working together to implement pooled registered pension plans as soon as possible.  On November 17, 2011, Bill C-25, An Act Relating to Pooled Registered Pension Plans and Making Related Amendments to Other Acts, was tabled in the House of Commons and passed first reading.

The objective of PRPPs is to provide low-cost defined contribution pension plans that would be available to both employees and the self-employed.

PRPPs will be administered by regulated financial institutions, which is expected to decrease the cost and complexity for small employers in setting up a pension plan for their employees.

PRPPs will be subject to most of the existing rules which apply to defined contribution RPPs (known as money purchase RPPs in the Income Tax Act).  Employers and employees (employed members) will make contributions which are limited by the RPP money purchase limits.  Individual members, which will include self-employed persons and employees of an employer that does not offer PRPPs, will make contributions that are limited by the RRSP contribution limits.

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