On December 14, 2011, the Department of Finance released income tax legislative proposals for Pooled Registered Pension Plans (PRPPs) – voluntary savings plans aimed at individuals who do not have access to employer-sponsored pension plans, notably employees of smaller employers and the self-employed. The Department of Finance has requested comments on these proposals by February 14, 2012.
The proposals will apply to both federally - and provincially-regulated PRPPs. They will come into force at the same time as the Pooled Registered Pension Plans Act – the federal legislation implementing PRPPs, which was introduced on November 17, 2011, and is discussed in our Tax memo “Pooled Registered Pension Plans: A new retirement savings vehicle.”
The tax rules for PRPPs are meant to complement the existing Registered Pension Plan (RPP) and Registered Retirement Savings Plan (RRSP) framework, and are to operate in a manner similar to multi-employer money purchase RPPs. This memo outlines income tax rules for Pooled Registered Pension Plans (PRPPs).