Posted: Tuesday, 21 December 2010

On December 16, Finance Minister Jim Flaherty, who had previously supported enhancing the Canada and Quebec Pension Plans, proposed instead a privately administered option called Pooled Registered Pension Plans (PRPPs). The CLC is opposed to PRPPs, as CLC President Ken Georgetti outlined in a letter to the Globe and Mail newspaper:

As published in the Globe and Mail, December 21, 2010

The pooled plans Jim Flaherty has proposed would be like group RRSPs but sponsored by a financial institution, as opposed to an employer. They will charge relatively high management fees because there will be a lot of pooled plans out there, with different investment options, so economies of scale won't be reached.

Unlike the CPP, there is no mandatory employer contribution in Mr. Flaherty's plans; no defined benefit based on career average earnings; no inflation protection; and no assurance of full portability. Significantly, enrolment of employees may be not be universal. There will almost certainly be an opt-out provision at the discretion of a province.

Opposition from the big banks and financial institutions has temporarily trumped advocacy for an expanded CPP. Still, at least six provinces favour CPP expansion. The issue isn't going away.

Ken Georgetti
President, Canadian Labour Congress