LIFE AND HEALTH INSURANCE INDUSTRY WELCOMES PROPOSAL FOR PENSION INNOVATION
News ReleaseRelease Date: 12/16/2010 Staff Reference: Wendy Hope
Toronto – The Canadian life and health insurance industry welcomes the proposal for Pooled Registered Pension Plans (PRPPs) discussed today by Finance Minister Flaherty. "This is a timely and important initiative. We know that 50 per cent of workers in the private sector do not currently have access to workplace retirement plans, and this would help fill that gap," said Frank Swedlove, President of the Canadian Life and Health Insurance Association.
"We believe this is a major step in the right direction, and we are hopeful that all provincial and territorial governments will be supportive of this initiative," added Mr. Swedlove. In particular, the industry is pleased that the proposed PRPP framework makes it easier and more cost-effective for small employers to offer pension plans and, for the first time, gives the self employed the option to participate in such plans. The PRPP framework would remove the requirement for an employer-employee relationship, and would have regulated financial institutions take on the role of sponsoring and administering PRPPs. And significantly, it would allow employees of small and medium sized businesses to participate in large pooled plans where the benefits of economies of scale can be realized.
Canada's life and health insurance industry currently administers 70 per cent of Canadian pension plans. The industry looks forward to working with governments on finalizing the details to get this up and running as soon as possible for the benefit of Canadians.
Vice President, External Relations