Draft legislation was tabled today for a PRPP program (Pooled Registered Pension Plan). The exact details have STILL yet to be determined, but here are the highlights:
So while there is a lot of good intention to help put small businesses on par with big company pension plans and increase retirement savings for Canadians en masse, I have my reservations based on the speculated details.
But most importantly:
How do you mandate lower costs on a PRPP but not on mutual funds? Mutual funds were designed for smaller investors to pool their money together to get a professionally managed portfolio at lower cost.
So if the costs are limited by legislation, and these costs are below mutual fund MER averages in Canada, the government is basically acknowledging investment costs in Canada are too high. If they set the maximum fees to be anywhere near mutual fund MER averages, the PRPP switches from suspect to useless.
Here’s a short two minute piece from CBC’s Havard Gould that appeared on The National:
Click here if you can’t see the video link.
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