Client Update: Nova Scotia Consultation on Pooled Registered Pension Plan (PRPP) Regulations
On September 9, 2015, the Nova Scotia Department of Finance and Treasury Board opened a consultation on draft Regulations for Pooled Registered Pension Plans (PRPPs). The draft Regulations and an FAQ are posted online. PRPPs are voluntary retirement savings plans in which employees and employers may choose to pool contributions and administration costs with other participants. Employers and employees decide how much they contribute to the plan. Third party administrators must be licensed in order to provide PRPPs and several insurance companies are currently licensed federally.
The Nova Scotia Legislature passed the PRPP Act in the fall of 2014 (for more information on the PRPP Act, see a summary here) but it has not yet been proclaimed in force as regulations still need to be finalized. In the PRPP Act, the Nova Scotia government largely adopted the federal Pooled Registered Pension Plans Act (Canada); similarly, the proposed Regulations largely mirror the federal Regulations. The differences between the proposed Regulations and the federal regulations include:
- Different definition of spouse (as adopted in the Nova Scotia PRPP Act).
- Different options for where the funds in a PRPP may be transferred – The options are consistent with those under the Nova Scotia Pension Benefits Act, which allows transfers to certain locked-in retirement savings arrangements including a locked-in retirement account (LIRA), life income fund (LIF) or life annuity. Conditions for life annuities are similar to those under the new Pension Benefits Regulations, including the requirement of a joint and survivor annuity if the member has a spouse. Limitations on the options are also consistent with expected amendments to the Pension Benefits Act and Regulations that would allow transfers between registered pension plans and PRPPs. Unlike the federal regulations, the proposed Nova Scotia Regulations do not allow transfer to a locked-in registered retirement savings plan (RRSP).
- In addition to meeting the requirements under the federal legislation, an administrator must register all of their PRPPs under the federal Act before they can be licensed in Nova Scotia.
More information on the federal PRPP requirements is available on the Canada Revenue Agency’s website.
Written comments on the proposed Nova Scotia Regulations may be submitted by October 9, 2015 to: PRPP@novascotia.ca or Finance Treasury Board, Pension Regulation Division, PO Box 2531, Halifax, NS, B3J 3N5.
The foregoing is intended for general information only. If you have any questions, or for a detailed list and background of our Pension and Benefits Team, please visit our website at www.stewartmckelvey.com.
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