Aug 23, 2012
By Michael Kramer
The prestigious CD Howe Institute is calling for pension reform and says Ottawa should re-think the rules for Pooled Registered Pension Plans.
They’re being pushed by the federal government as good vehicles to help Canadians save for retirement.
But CD Howe’s study warns that they could amount to a tax on the poor unless the rules are changed.
The study suggests that many low- to mid-income Canadians should avoid PRPP’s as currently proposed. It says they’re just RRSP’s with a new coat of paint.
Tax rules for PRPP’s are essentially identical to those that apply to RRSP’s.
CD Howe says many low-to-middle income workers in the private sector wouldn’t be able to save enough fro retirement with PPRP’s because of taxes and government clawbacks on benefits at very high rates.