Are PRPPs or Quebec’s VRSPs the solution to declining pension coverage?

Pension reform has been the subject of much debate across Canada over the past year and a half, driven by two proposals with the potential to change the pension landscape.  The first was the expansion of CPP/QPP to double payable benefits.  This proposition was initiated by the labour movement and was originally supported by Minister Flaherty and some Provincial governments; then, in December 2010, the draft framework for the Pooled Registered Pension Plans (“PRPP”) was introduced.  For Minister Flaherty this resulted in a shift in focus from the CPP/QPP expansion to a promotional push for the PRPP which resulted in the creation of Bill C-25 (or the Pooled Registered Pension Plan Act).

In March 2012, Quebec followed the lead of the Federal Government by announcing the new Voluntary Retirement Savings Plan (“VRSP”) in the Provincial Budget.  Finally, on June 12, 2012, the House of Commons passed Bill C-25.  On the same day, Quebec’s Minister of Employment and Social Solidarity tabled Bill 80, which lays the foundation for the Voluntary Retirement Savings Plan (VRSP).  The expected effective date of establishment of VRSPs is January 1st, 2013.

While the Federal and Quebec governments believe that PRPPs and VRSPs will help to address current gaps in pension savings for Canadians not enrolled in a pension plan, it is not clear how this will be achieved (…)

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