Canada's minister of state for finance, Ted Menzies, introduced legislation in the Canadian Parliament on Thursday to establish Pooled Registered Pension Plans.
The new retirement vehicle is intended to serve the 61% of Canadians who do not now have a pension plan, according to a news release. It will be made available to employers and the self-employed who are not currently covered by a defined benefit pension plan.
It is intended to provide a low-cost defined contribution option to employers, employees and the self-employed in Canada. Large pooled funds will be used to minimize costs to participants.
“Today marks a major milestone in our efforts to ensure the ongoing strength of Canada's retirement income system by providing a pension option for the many workers … who currently do not participate in a company pension plan,” said Mr. Menzies, in the news release.
The PRPP was first proposed by a joint federal-provincial research group in December. Mr. Menzies had worked since then to gain support for the initiative, meeting with provincial and territorial finance ministers across Canada.