Federal government releases draft proposals on pooled registered pension plans

The federal government has released draft legislation with respect to the implementation of pooled registered pension plans (PRPPs), together with a backgrounder summarizing the key features of the proposed plans. Those features include the following.

• There will be no employer-employee relationship required for participation in a PRPP, meaning that both the self-employed and employees whose employer has no involvement with a plan can participate.
• Contributions made by employers, employees, and self-employed individuals will generally be deductible for tax purposes.
• Immediate vesting of contributions made by an employer will be required.

More detailed information can be found in the Department of Finance draft legislation and backgrounder, which are available at http://www.fin.gc.ca/n11/11-134-eng.asp.

The federal government is seeking input on the proposed rules, and the deadline for submissions is February 14, 2012. More information the methods by which comments can be submitted can be found on the Department of Finance Web site.