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Further to our earlier post about Pooled Registered Pension Plans (PRPPs), a new voluntary large-scale defined contribution pension plan, the federal government has proposed further regulatory details about some of the potential rules and regulations.

For all the proposed details, please visit the government website.

Here are some highlights that affect you, the employer (and the PRPP Plan Administrator) if the legislation is approved.

Employers will be required to:

  • Set-up a PRPP (ENCOMPASS can you help you with this) and make available to employees to contribute via payroll deduction.
  • Automatically enroll employees into the PRPP (employees can choose to opt-out).
  • Decide on a default investment option for those employees that do NOT make an investment choice. This default option must be either a balanced fund or a portfolio of investments that considers employee’s age.
  • Determine investment options  – no more than six (including the default fund)
  • Notify employees in the event there are any changes to the investment funds (and invest employee’s funds in the default fund in the event the employee does not make a fund choice).

As we continue to hear more details about the PRPP, we will keep you updated.

If you need help setting up a PRPP for your organization, please contact ENCOMPASS Benefits & HR Solutions as there will likely be 200,000 employers submitting requests for new plans.

We are recommending clients to be proactive and set up a plan before the huge rush.

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