November 23, 2016
Proposed Legislation Introduced that would Create Retirement Savings Options for Manitobans, Better Protect Investors: Friesen
The Manitoba government has introduced proposed legislation that would enable the creation of pooled registered pension plans (PRPPs) to offer options to encourage people to save for retirement, Finance Minister Cameron Friesen announced today.
“Many employees and self-employed Manitobans do not have access to a workplace pension,” said Friesen. “These plans are designed to help people defer their income and save for retirement, while offering investment and savings opportunities at lower administration costs.”
PRPPs would be defined contribution-style plans that are set up and administered by federally licensed providers. The proposed pooled registered pension plans (Manitoba) act would build on federal legislation and set out the rules and processes for establishing these types of plans in Manitoba.
With PRPPs, contributions from many individuals are invested together, which helps lower administration costs, the minister noted. The funds in the individual’s account accumulate, are tax-deferred and must be used to provide retirement income.
The PRPP contribution limit would be based on the individual’s registered retirement savings plan (RRSP) contribution limit. Contributions to a PRPP would be counted against RRSP contribution room.
Once the proposed legislation is in place and plans are available, individual employees would be automatically enrolled in a PRPP by the employer if an employer chooses to participate in a PRPP. Processes are also being developed to allow self-employed individuals, or employees whose employer does not offer a pension plan, to open a PRPP account directly, Friesen said.
In addition, proposed legislation was also introduced that would amend the Securities Act to streamline co-operation between securities regulators in Canada.
“If an individual is found to have breached securities laws in another province, Manitoba must currently conduct a separate hearing, which is costly and time-consuming,” said Friesen. “This new legislation would allow automatic enforcement of orders and settlements from all Canadian securities regulators in Canada, providing better protection for investors while saving time and money.”
The proposed amendments would allow automatic reciprocation and enforcement for orders made in other provinces. This would help prevent individuals who have been disciplined for their actions in other markets from trying to set up in Manitoba.
Every year, Manitoba implements 25 to 30 of these kinds of orders through a hearing, the minister said.
Similar legislation is in place in Alberta, Nova Scotia, New Brunswick and Quebec, and is proposed in Ontario and British Columbia.
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