New Law Enhances Retirement Savings Umbrella for Canadians
The government of Canada finally adopts its innovative and novel retirement saving policy after bringing in structural changes to counter any hard recession periods like the 2008 financial meltdown.
Keeping with its past record of having one of the most well-known and respected retirement income systems in the world, the government of Canada has introduced a new improved system. The newly introduced retirement law will not only make retirement savings easier for millions of Canadian citizens but could very well act as a potential yardstick for other countries to follow.
Proactive Canadian Government Policies: Although the Canadian government historically has always had a strong retirement savings system in place, but it has not deterred the government to consider amendments and formulate new laws. In the last decade the Canadian government has played a very proactive role by introducing initiatives to enhance the basic structure of the country’s retirement income system.
The government in the past has successfully weaved and integrated new pension plans or (RPPs), completed the triennial review of the Canada Pension Plan (CPP) and included a Guaranteed Income Supplement (GIS) to directly benefit senior citizens in the country.
With the 2008 global financial crisis and economic meltdown, voices were raised within Canada to even better the laws in order to safeguard the vulnerable older citizens. Keeping up with its policy of being a proactive government, the Canadian government introduced a study mechanism for provincial legislative frameworks for employer-sponsored pension plans or RPPs.
Formulation of New PRPPs Act: Rather than jumping the gun to bring a new law or amend the older law to safeguard older citizens post 2008 crisis, the Canadian government took a step-by-step approach. After completing the study mechanism for a new law along in collaboration with all the provinces and territories, the government started on-line discussions to gather inputs from the people directly. There has been no other case of such a massive involvement of the normal public at large to exchange their views with the government to find the best possible solution. After the series of study mechanisms and online interactivity, the government introduced the new PPRP framework last year. The legislation implemented the new federal portion of the PRPP framework has hence been introduced and approved by the Canadian parliament.
Advantages of PRPPs: The newly adopted PRPPs or the Pooled Registered Pension Plans (PRPPs) Act acts in the best interest of common people by simplifying saving opportunities for Canadian citizens especially the aged.
PRPPs are part of an innovative plan covering the employers, the employees and the self-employed Canadian citizens. For the employers, PRPPs will provide a simple and low-cost retirement option that can be offered to the employees in a cost effective manner. While enabling more and more people to benefit from the lower investment costs by active promotion of pooled pension plans. PRPPs have plans to safeguard and offer accumulated benefits as and when people switch their jobs that can also offer Canadians greater purchasing power because of successful workplace pensions.