Pension plans can be a very helpful retention mechanism for good employees (and, it must be noted, bad ones too) and many larger employers offer them to their employees as part of their overall compensation package. However, the cost and complexity of pension plans have also meant that they may not be considered by most smaller-scale employers. Recent legislative enactments have attempted to address this.
In 2012, the federal government enacted the Pooled Registered Pension Plans Act, creating Pooled Registered Pension Plans (PRPPs), in an effort to make pension plans available to employees of small companies and to self-employed individuals. PRPPs are designed to be easy for small-scale employers to administer, while also providing participants with all of the investment savings and opportunities of large pooled funds. On May 2, 2016, the government of British Columbia brought sections of Bill-9 into force, allowing provincially-regulated BC employers to offer their employees the ability to participate in PRPPs.
As British Columbia employers in smaller enterprises may wish to offer their employees the option of participating in a PRPP, now is a good time to learn how they work and whether they are right for your workplace. Take a look at the CRA’s PRPP info page to learn more.