Nova Scotians will soon have a new option to save for their retirement to help ensure financial security in their later years.
Finance and Treasury Board Minister Diana Whalen announced today, Oct. 15, legislative changes to provide Nova Scotians access to Pooled Registered Pension Plans.
“All Nova Scotians deserve a pension option that allows them to retire with security and comfort, and Pooled Registered Pension Plans help achieve that,” said Ms. Whalen. “This is an innovative way for small businesses to provide pension options to their employees, filling a need that was not available previously.
“These will also be available to employees without a participating employer, and, the self-employed.”
Only about 40 per cent of Nova Scotians have a pension and less than 20 per cent of working Nova Scotians contribute to a Registered Retirement Savings Plan.
Pooled Registered Pension Plans provide a low-cost, regulated pension option for employers, employees and the self-employed.
They can help small businesses attract and retain employees. They have portability features that will help workers take their plan with them or transfer to another Pooled Registered Pension Plan if they switch employers, which helps young, mobile employees get a valuable, early start on a pension.
Participation for everyone is voluntary.
“This is a flexible, low-cost plan that will make it easier for Nova Scotians to save for their retirement,” said Jennifer English, senior policy analyst for the Canadian Federation of Independent Business. “Pooled Registered Pension Plans will be an excellent addition to the retirement savings options for small business owners and their employees.”
The plans will be administered by qualified, licensed financial institutions, removing the administrative burden for employers and making them affordable for small to medium-sized employers to offer.
“Pooled Registered Pension Plans will help bridge the gap in retirement savings for the thousands of Nova Scotians who currently do not have access to a workplace savings program,” said Marc Avaria, vice-president, group small business, Manulife. “Manulife is dedicated to working with government to offer a Manulife Pooled Registered Pension Plan that will save employers time and effort, while providing their employees with a viable way to save for the future.”
The federal government passed legislation to enable Pooled Registered Pension Plans for federally-regulated industries in 2012. Federal regulations are now in place, and five insurance companies have been licensed to provide the plans.