The Financial Post's Jonathan Chevreau article on the plans of the federal government to proceed with Pooled Registered Pension Plans (PRPP) contains the all-too-telling mention that "Naturally, Bay Street is salivating at the prospect. This is a giant potential opportunity for the nation’s banks, mutual fund companies, insurance firms and a growing number of manufacturers of exchange-traded funds." One is "naturally" led to wonder who will benefit most from PRPPs, ordinary Canadians trying to build a pension, or the financial industry. I cannot tell for sure but I own shares in the financial industry.
Also no doubt salivating are the financial planners and advisors Mr Chevreau also mentions, since the added complexity of another retirement savings layer with the PRPP will require more figuring out.
Monday 18 July 2011
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3 comments:
Could be a good move, provided these PRPPs have some employer tax incentive for matching contributions, like in US-style 401k plans. (It's amazing to me that RRSP matching contributions have absolutely no tax advantage in Canada.)
Also, it's important to me that participation in any such plan is voluntary.
PRPPs are a huge dog-and-pony show and do nothing substantial to address retirement challenges ahead. Having the word "Pension" in there is a crock; A pension is something guaranteed,and the only guaranteed with PRPPs are the enormous fees it will generate for the financial industry from its "customers".
Funny how the industry still seems to be taking shots at the CPP, Maybe the idea isn't dead. Witness the July Financial Post Opinion piece by Neil Mohindra "Pension Overkill" and the other Aug.6 also in FP by Ian Russell - "CPP No Silver Bullet" http://www.financialpost.com/todays-paper/increases+silver+bullet/5214933/story.html. These folks wouldn't be wasting their time if they thought the idea was dead.
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