New Brunswick is now a party to the ‘Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans’ (PRPP Agreement), says an Aon ‘Radar.’ This makes pooled registered pension plans (PRPPs) now available in the province.
New Brunswick is now a party to the ‘Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans’ (PRPP Agreement), says an Aon ‘Radar.’ This makes pooled registered pension plans (PRPPs) now available in the province.
It joins Canada, British Columbia, Manitoba, Nova Scotia, Ontario, Quebec, and Saskatchewan as parties to the agreement.
The agreement is intended to streamline the regulation and supervision of PRPPs to effectively delegate to the Office of the Superintendent of Financial Institutions (OSFI) responsibility for licensing, registering, and supervising PRPPs whose operations fall within the jurisdiction of both the federal government and that of a participating province. The agreement does not give OSFI responsibility with respect to Quebec’s voluntary retirement savings plans (VRSPs), but permits authorized VRSP administrators to act as PRPP administrators under the federal PRPP Act if they register a PRPP federally.
PRPPs are professionally administered, defined contribution style pension plans targeted to employees and self-employed persons who do not have access to a workplace pension plan. They may pool the funds in the accounts of participating employees and self-employed persons to achieve low costs in relation to investment management and plan administration.
They are designed to include features which will remove traditional barriers that might have kept small and medium-sized businesses from offering workplace pension plans to their employees. In particular, the fiduciary obligations related to the management of the plan on behalf of plan members will be shifted from the employer to licensed administrators. In addition, responsibilities related to the professional administration of the plan will be borne by the licensed administrator.
The Income Tax Act provides deductions in respect of both employee and employer contributions. Contributions and investment earnings are tax-exempt until such time as benefits commence to be paid.
