The Canadian government is moving ahead with plans to create another retirement savings plan for Canadians. As if RRSP's, RPP's, TFSA's, LIRA's, LIF's, CPP, OAS, etc. are not enough for the public to juggle, a new optional pension plan, which will run in addition to CPP and OAS, might receive parliamentary approval as early as this fall.
The plan would offer small businesses and employees who do not already have a company pension plan an option to add to a privately managed "pooled pension." Given that 60 percent of Canadians do not have a company pension plan, something had to be done, but whether this is the answer is far from certain. The investment options that will be allowed to be included inside the new plans have not even been decided yet.
If the legislation passes, AND receives approval from provincial ministers, then Canadians will be choosing from options that are to be managed by private institutions. So the same institutions that manage our RRSP's etc. will probably manage the new plans as well. New entrants could include some of the country's major pension plans as well, which will charge for their management services and pool the money together with their existing members. Overall, this plan will be a great boon for Canada's financial companies, which will have yet another, government sponsored, way to charge Canadians more fees.
Surely there will be more news on this plan as it develops, but for now, expect the banks to be gearing up for another marketing bonanza. TFSA's were not that long ago, and now they will have another opportunity from the Canadian government to attack our wallets.
More information is at the Vancouver Sun.
Happy Investing : )
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