Touted as a practical solution for those who currently don’t have access to a workplace pension, the pooled registered pension plan (PRPP) also holds the potential to create a new revenue stream for the industry.
Several of the large retirement service providers have already jumped at this opportunity and are ready to roll out PRPP products when (or if) the scheme receives approval by provincial governments.
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However, opinions are strong and emotions run high among industry professionals concerned about whether the PRPP provides actual value to most working Canadians.
“The PRPP is a step in the right direction, but I believe it’s inadequate and no more attractive than RRSPs,” said Susan Eng, vice-president for advocacy with CARP, during the pension panel discussion at the Advocis Regulatory Affairs Symposium, held earlier this week in Toronto. “We are looking for a national or regional vehicle to help address this issue.”
Eng says CARP members would prefer an expanded Canada Pension Plan (CPP) to the PRPP, with the main reason being that CARP members are skeptical of the private sector and afraid the fees will cut into savings.
Malcolm Hamilton, a partner with Mercer and another guest on the panel, said an expanded CPP or the PRPPs could work, but, as it currently stands, a large portion of the population would not benefit financially from PRPPs.