Urging provincial government to implement legislation allowing employers to voluntary offer retirement savings option to employees
Federal Minister of State (Finance), Ted Menzies, was in St. John’s today meeting with business representatives, including NL Employers’ Council (NLEC) Executive Director, Richard Alexander, on the Federal government’s proposed Pooled Registered Pension Plans (PRPPs). The proposed PRPPs will provide access to retirement investment plans for the 60% of workers in small and medium businesses that currently have no pension plan. This initiative will also help support retirement savings in the middle class – the group identified to be the most at risk for a shortfall in retirement income. The NLEC has made representation to the Government of Newfoundland & Labrador and encouraged their support on the PRPP as a voluntary means for all employers to encourage retirement savings within their employees. According to the Minister, all the provinces are supportive of the idea of providing small and medium businesses with Pooled Registered Pension Plans, and of moving forward with enabling legislation as soon as possible. Menzies will also be meeting with Provincial Minister of Finance, Tom Marshall today.
Voluntary PRPPs have been identified as the most effective and targeted alternative to improve Canada’s retirement savings scheme. The NLEC supports PRPPs over mandatory increases in CPP, as proposed by some. Mandatory increases in payroll taxes, such as CPP, have a detrimental impact on employment and salary levels. Canadians should not be forced into one method of retirement savings, but rather be educated to assess their own circumstances and choose for themselves. In order for the PRPP framework to work for employers, it must be flexible and voluntary. The NLEC urges the provincial government to implement legislation around PRPPs that allows employers and employees the ability to voluntarily opt into the plans, maintaining freedom of choice when it comes to retirement savings.
The PRPP will provide employers, particularly small/medium sized employers who otherwise cannot afford to offer a pension plan, the opportunity to offer retirement savings to their employees with low management costs. This will enable more employers to offer retirement savings options to their employees, and will aid with recruitment and retention. This is necessary in this province now more than ever, due to the increasing labour shortage.
“Once this legislation is in place, it is important for employers to offer these plans to their workforce,” says NLEC Executive Director, Richard Alexander. “Education on retirement savings for both employers and employees is key, and the NLEC will continue to educate employers on these plans as they take shape.”
The NLEC position paper on PRPPs can be viewed at:
https://www.nlec.nf.ca/media/uploads/Pooled_Registered_Pension_Plan_NLEC_Position_Paper.pdf
