The government has introduced legislation to allow Pooled Retirement Pension Plans (PRPPs), a kind of group RRSP for small businesses. Employees can have voluntary contributions deducted from their pay, and employers may or may not also make some contribution to employees’ pensions. Pension managers, such as a big bank, would manage the funds contributed by the employees and employers, providing efficiencies.

AIMS Research Fellow Harry Koza argues in this commentary that, while the PRPP is a timid step, it is a step in the right direction. He addresses the major criticisms of PRPPs, but highlights more important issues facing pensions/retirement, like the Bank of Canada keeping interests rates at crisis levels to keep stimulating a stimulus-addicted economy.

Koza offers bold suggestions to resolve the pension/retirement problems in the country, starting with picking the best ideas from the New Zealand, Chile, UK and Australian experiences. He suggests looking again at RRSPS, or increasing the allowable annual contribution to a TSFA. Or perhaps allowing people who cannot use all their RRSP contribution room to sell some of it to those who could use more RRSP room.

In Doin’ the PRPP Walk, Koza makes clear that a necessary first condition to achieving any meaningful kind of pension reform is for our political masters to have to rely on the same kinds of pensions that we do. Get them in the same leaky pension boat with the rest of us, and watch how fast they start helping out with the bailing.

Click here to read the full commentary.