Since blog posts (Oct.25 & Nov.14), the Canadian government’s announcement on the pooled pension plan scheme finally hit the financial news headlines. Immediately critique and analysis began on the proposed Pooled Registered Pension Plans (PRPPs). A Toronto Star headline called the government’s new plan “tinkering with pensions”.
Some make argument that Canadians would better benefit by changing the parameters on the Canada Pension Plan (CPP) which is a mandatory contribution. These PRPP”s are presented as voluntary participation just as are RRSP’s, but are designed to target the self-employed and those who work in small businesses. So if you’re in line with Catherine Swift of the Canadian Federation of Independent Business (CFIB), you like this plan.
From the debates I’ve seen on the whole issue of pension reform, I’m not sure that everyday people are getting the complete picture to understand how any “tinkering” will benefit them over life time cycles of spend, save, borrow and debt. This debate belongs to everyone of all ages and income levels.
Looks like this new pension plan will pass into legislation sometime in 2012, and PRPP’s will be just another option, a vehicle for Canadian’s to save money to help in financing longevity. We’ll have to wait to see the fine print on the details when the deal is done. I expect as I always do, I’ll make that regular call to my highly trusted accountant who is also a Certified Financial Planner (CFP) for clarity around all the options – and tinker away.