The Conservative government is pitching a private pension plan for small businesses, employees and the self-employed, in a bid to encourage more Canadians to save for retirement.


Finance Minister Jim Flaherty, speaking to reporters in the foyer of the House of Commons on Thursday, says he'll push pooled registered pension plans for smaller private employers at a meeting next week with his provincial counterparts. ((Adrian Wyld/Canadian Press))

But opposition parties are slamming the idea, accusing the Tories of soft-pedalling on pension reform, at the expense of vulnerable Canadians.

The private pension plan concept – known as a pooled PRPP – will help more Canadians plan financially for their future, especially those in their 20s, 30s and 40s, Finance Minister Jim Flaherty told reporters at an Ottawa news conference Thursday.

"If you work for a smaller business in Canada, the employer won't [currently] offer a pension plan. This plan would say to an employer, 'Listen, you can offer this plan but you don't have to contribute to it.' Employees would contribute to it, or can opt out.


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Flaherty plans to sell the idea of a low-cost pooled pension to his provincial counterparts next week, when they meet in Kananaskis, Alta., on Monday. He's already written to provincial finance ministers about the proposal.

The government and provinces have also discussed expanding the Canada Pension Plan, but Flaherty said agreement on that issue would be difficult. Alberta opposes the move and Quebec's intentions are not clear.

NDP Leader Jack Layton accused the Conservatives of cozying up to "captains of finance" on Bay Street instead of tackling the onerous task of expanding CPP benefits.

"They know the CPP works, it's just not large enough," Layton said.

How to improve Canada's public pension fund is something "we will continue to look at," said Prime Minister Stephen Harper. "But now is not the time to look at increases in CPP contributions."

The proposed pooled pension plan is "a vehicle a lot of small business owners are interested in, and I know provinces are interested in exploring it," Harper said.

Pooled pension plan would be optional

The low-cost pension plan would be built on defined contributions, and run by private-sector financial institutions. It would be available to any type of employee, as well as the self-employed.

Workers could opt in, or opt out, but at least they would have the option of accessing a "low-cost, high-security pension plan," said Flaherty.

If provincial finance ministers agree to a common framework for the PRPP, plans could be set up as soon as next year.

Liberal critic Judy Sgro also panned the plan, accusing Flaherty of taking the easy way out on pension reform.

"This is a baby step ... but it's not going to do much for [many] self-employed, for women that are in and out of the work force, for those in rural Canada," she said. "This applies to a very small segment."

Ottawa and the provinces have been in talks about reforming Canada's retirement-income system for more than a year.

The 2008 financial crisis revealed the state of Canadian retirement savings, which — even for people with company-sponsored plans — often don't cover anticipated living costs in old age.