A new kind of retirement savings tool designed for small businesses and self-employed Albertans was announced by government officials in Calgary Friday.
Pooled registered pension plans (PRPPs) will give members access to the benefits of being a part of a large fund at a low cost, the province said.
"Currently, only one in six Albertans working in the private sector participates in an employee pension plan," said Kyle Fawcett, the province’s associate minister of finance.
"We’ve introduced this legislation so that all working Albertans — including those who work for small companies or are self-employed — have more choices when it comes to retirement savings," he said.
Richard Truscott, director of provincial affairs in Alberta for the Canadian Federation of Independent Business, said PRPPs will be a good option for small business owners and their employees.
"Our members tell us one of the main reasons they do not have a company retirement plan for themselves and their employees is because of the high cost and administrative burden of offering a plan," Truscott said.
The large, defined-contribution plans will be professionally managed by providers such as banks and insurance companies, and will be open to any employer or individual, the province said.
The plans will be portable so that members’ accumulated benefits to move with them from job to job.
Bill 18 — the Pooled Registered Pension Plans Act — will make Alberta one of the first provinces to offer this retirement savings tool, the province said.