Pooled Registered Pension Plans - Federal Government Takes Next Step

The federal government followed up on its promise in this year's budget to implement pooled registered pension plans (PRPPs) "as soon as possible", with the release of a consultation paper (the Paper) that considers the potential tax rules for PRPPs. The Paper seeks feedback on a number of issues, many of which arise as a result of a key difference between a regular defined contribution pension plan and a PRPP -- being that self-employed individuals and employees of non-participating employers may contribute to the latter.

For example, the document raises the following issues:

• the eligibility requirements to be a PRPP administrator;
• the application of the "primary purpose" test to PRPPs (i.e., the primary purpose of a registered pension plan (RPP) must be to provide periodic payments to individuals after retirement in respect of their service as employees);