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Three more provinces introduce PRPPs; Ontario releases draft PRPP regulations

In May 2016, three new provinces adopted and proclaimed into force legislation permitting pooled registered pension plans (“PRPPs”): British Columbia, Nova Scotia and Saskatchewan.

PRPPs are an optional form of pension plan for employers who wish to offer a low-cost, defined contribution (DC) plan to their employees. The PRPP is sponsored and administered by a financial institution, while the employer sets the contribution rates without having the governance responsibilities associated with registered DC pension plans. The employer may choose to make contributions to the plan, or it can be funded solely by employee contributions.

Ontario releases draft PRPP regulations

On July 5, 2016, Ontario published draft regulations to facilitate PRPPs. The rules of the federal PRPP legislation would apply to PRPP design and administration, but Ontario rules would apply for marriage breakdowns and spousal rights upon death of a PRPP member. The Ontario Pooled Registered Pension Plans Act, 2015, permits Ontario to sign the Multilateral Agreement referenced below.

Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans

Effective June 7, 2016, the federal government adopted the new Multilateral Agreement Respecting Pooled Registered Pension Plans and Voluntary Retirement Savings Plans (the “Agreement”), and designated British Columbia, Nova Scotia, Quebec and Saskatchewan as provinces that will be part of the Agreement. For PRPPs with members outside Quebec, the Agreement streamlines supervision by ensuring that plan administrators only need to deal with one supervisor (i.e., the federal Office of the Superintendent of Financial Institutions, or “OSFI”) for administrator licensing, plan registration and ongoing plan supervision. This would allow a multi-jurisdictional employer to offer the same PRPP across its workforce.

The Agreement also streamlines the licensing process for administrators that want to offer PRPPs and Voluntary Retirement Savings Plans (“VRSPs”) by establishing that OSFI and the Quebec Autorité des marchés financiers (“AMF”) recognize licences issued by each other (with a few conditions in the case of the AMF, i.e. that the applicant be a regulated financial institution, that they pay the licensing fee to the AMF, provide financial information and a business plan, and obtain liability insurance).


As a result of these recent developments, PRPPs and VRSPs are now available for federally regulated employers and employers in British Columbia, Nova Scotia, Quebec and Saskatchewan. Other provinces such as Ontario have already proposed or enacted PRPP legislation, and once they proclaim it into force and join the Agreement, PRPPs and VRSPs will become a more viable option for employers who wish to offer a defined contribution pension plan to their employees across the country.

News & Views - July 2016 (PDF)