Pooled Registered Pension Plans

PRPPs – or what I prefer to call Mr. Flaherty’s Inferior Pension Plan or FLIP- are a poor alternative to the option of expanding the Canada Pension Plan. Unlike the CPP, PRPPs will not provide a defined pension benefit  in retirement; there is no required employer contribution; there is no inflation indexing; costs will be much higher than the CPP, and may even be as high as for mutual funds held in RRSPs ; and there is no guaranteed portability between jobs.

Hard to love them, unless you are a financial institution planning to set one up, or a small employer who wants to avoid supporting pensions. (I say small because the great majority of medium and larger business do provide some support to pensions, even if this is in the form of assisting RRSP savings as opposed to an employer pension plan.)

Here is the CLC brief on the issue.

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