On February 28, 2013, the British Columbia government introduced Bill 16, the Pooled Registered Pension Plans Act (the “Act”).
The Act will make B.C. the first province to legislate Pooled Registered Pension Plans (PRPPs). PRPPs were introduced for federally regulated employers in December 2012 and were summarized in the January 2013 issue of News & Views.
The B.C. legislation is nearly an entire adaptation of the federal legislation. However, B.C. PRPPs will be regulated by the provincial regulator, the Financial Institutions Commission of British Columbia (FICOM). FICOM will likely develop its own policies and interpretations for PRPPs over time. Those policies could differ from those of the Office of the Superintendent of Financial Institutions Canada (OSFI), the federal regulator.
When the Act comes into force, PRPPs will be available to all workers in B.C., including the self-employed. However, the Act will not come into force until proclamation by the Lieutenant Governor. The date for proclamation is not yet known.
Like the federal legislation, the Act will not require employers to offer PRPPs to their employees and it will not require employer contributions to PRPPs. If an employer decides to offer a PRPP, then its employees will be automatically enrolled; but, subject to certain rules, they will have the right to terminate their membership or to opt out of making contributions.
Given the voluntary nature of PRPPs, we do not expect them to play a major role in significantly expanding pension coverage, one of their stated objectives when the concept was first developed. However, we will continue to monitor the progress of this legislation in B.C., and in other provinces should it arise, and explore means for their implementation and use in the future.
Given that recently B.C. and Alberta have been coordinating efforts on their pension reforms, one might expect that Alberta may soon follow B.C.’s lead by introducing similar legislation for PRPPs.