Ottawa should rethink the tax rules for Pooled Registered Pension Plans (PRPPs) or they will not realize their potential to be a good pension savings vehicle for Canadians, according to a new report from the C.D. Howe Institute.
In the report titled “Pooled Registered Pension Plans: Pension Savior — or a New Tax on the Poor?” authors James Pierlot and Alex Laurin say Ottawa’s proposed pooled pensions aimed at ensuring Canadians have enough savings to retire should be avoided by many low to mid-income Canadians.
In the report, which was released Thursday, the authors conclude that PRPPs could be “vastly improved” by changes to proposed tax rules.
“As currently proposed, PRPPs present only the appearance of reform because they are for the most part a re-release of an existing retirement savings vehicle — RRSPs — with a new coat of paint,” said James Pierlot, a pension specialist and member of the Pension Policy Council of the C.D. Howe Institute.
Pooled pensions are voluntary and are aimed at reducing costs and improving investment returns for small business and self-employed Canadians through asset pooling and third-party administration.
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