Pooled Registered Pension Plans coming to Nova Scotia
Only 40 per cent of Nova Scotians have a pension plan, less than 20 per cent contribute to RRSPs
The province has introduced changes in legislation that will allow more Nova Scotians to access Pooled Registered Pension Plans and save for retirement.
According to the province, only 40 per cent of Nova Scotians have a pension plan and less than 20 per cent contribute to RRSPs.
On Wednesday, Nova Scotia joined Ottawa and western provinces by introducing the new, voluntary way to save.
Pooled Registered Pension Plans hold assets for employees and businesses. Finance and Treasury Board Minister Diana Whalen says the savings are in the employee's name and follow them throughout a career.
"It's our goal to provide a low cost, regulated pension option for employers," she said.
Jennifer English with the Canadian Federation of Independent Business says small business will benefit because its cheaper and easier than RRSPs and especially better for them compared to defined benefit pension plans.
"This is something we can offer that's nice that's an additional benefit in our realm of possibility," she said.
It will also mean a whole new market for financial companies who will be pitching these to employers according to Kevin Higgins with Manulife Financial.
"For many employers starting out they don't want to be committing, this is a great opportunity for small business to do something that sustainable," he said.
Progressive Conservative Party Leader Jamie Ballie says it's an expensive way to administer pension savings and consumers would be better off with an improved Canada Pension Plan.
"It needs to be upgraded and revised but it's one of the best pension plans in the world. It has the lowest cost to investors," he said. He called PRPPs nothing more than glorified savings accounts.
To save money, Nova Scotia intends to enter into an agreement with the federal government and other provinces. The deal would see the federal superintendent of financial institutions responsible for supervising PRPP's.