FCAA is Saskatchewan’s financial and consumer marketplace regulator.
Pensions – New Pension Option Unveiled For Saskatchewan Workers
April 8, 2013 - The Government of Saskatchewan today introduced legislation to create an important new option to help provincial residents save for retirement.
The Pooled Registered Pension Plans Act will ensure all Saskatchewan workers are eligible to enroll in low-cost, tax-assisted pension plans, providing an alternative for those workers who currently do not have access to group pension plans. Amendments are also being introduced today to The Saskatchewan Pension Plan Act which will permit the trustees of the Saskatchewan Pension Plan (SPP) to apply to be a licensed Pooled Registered Pension Plan (PRPP) provider.
“Our Government is pleased to provide Saskatchewan residents with additional opportunities to save for retirement,” Justice Minister and Attorney General Gordon Wyant said. “These legislative changes will provide new and affordable pension options to employees of participating employers and the self-employed.”
“As our province grows, it is important that our Government looks for ways to help improve the quality of life for Saskatchewan people,” Finance Minister Ken Krawetz said. “In some instances the generators of job growth - entrepreneurs, small businesses and self-employed people - struggle to provide a registered workplace pension plan.”
“PRPPs offer people an important option; a simple, defined contribution plan that keeps costs and fees down for employers, particularly small businesses. We think this is a great way to help Saskatchewan people save for their retirement” Krawetz said.
The province’s introduction of legislation follows the federal government’s legislation passed in December 2012, as part of a national effort to make low-cost, well regulated pension plans available to millions of Canadians who don’t have access to occupational pension plans. The governments of British Columbia and Quebec have introduced similar legislation.
PRPP providers will administer these new plans, reducing the administrative burden on employers. In addition, employer contributions to PRPPs will not be considered salaried compensation and will have certain payroll advantages over alternative models like group Registered Retirement Savings Plans.
Tim Calibaba, Chair of the Board of Trustees of the Saskatchewan Pension Plan, welcomed the introduction of legislation and the amendments which will permit the trustees of the SPP to apply to be a PRPP provider.
“The Saskatchewan Pension Plan was created in 1986 to provide a unique way to save for retirement for people with little or no access to employer-sponsored pension plans or other retirement savings arrangements. These changes help us provide even more choice in offering ways Saskatchewan workers can save for their retirement,” said Calibaba.
Under the legislation proposed by the Government of Saskatchewan, an employer’s enrolment in these plans is optional. If an employer chooses to offer a PRPP to its workers, the employees will be automatically enrolled but will also have the ability to opt out.
Employers will not be obligated to make matching contributions and workers whose employers do not set up a PRPP, as well as self-employed individuals, will be able to deal directly with a PRPP administrator to open an account, similar to opening an RRSP.
The Financial and Consumer Affairs Authority of Saskatchewan will be responsible for overseeing the PRPP legislation and will develop further regulations that are required before this legislation is proclaimed.