B.C.'s PRPP legislation was re-introduced in Bill 9 on February 19, 2014. Previously, B.C. introduced PRPP legislation in Bill 16 on February 28, 2013, but this bill died on the order paper.
PRPPs are intended to be a broad-based, low-cost, defined pension contribution vehicle that will be available to all employees, employers and self-employed individuals. The PRPP will offer these individuals the benefits of participating in a large pension plan like the defined contribution plans many large companies offer, and will also allow employers to offer retirement savings without the cost of setting up a pension plan and administering it.
Federal legislation for the PRPP framework, which provides a new option for tax-effective retirement savings for employees of small businesses and self-employed individuals who don't already have a company pension plan, was included in Bill C-45, which received Royal Assent on December 14, 2012.
Alberta and Saskatchewan have already passed enabling legislation to make PRPPs available in those provinces. Quebec has passed a similar version of the PRPP legislation called the Voluntary Retirement Savings Plans (VRSP).
B.C. PRPP details
Under the new rules, employers are not obligated to provide PRPPs and their contributions to the plan are optional. If an employer chooses to offer a PRPP to employees, the employees will be automatically enrolled. However, they have the right to opt out of the plan. Also, any worker has the option to join a PRPP, even if their employer chooses not to provide one or if they are self-employed.
For more information, contact your KPMG adviser.
Information is current to February 25, 2014. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500