Small and medium enterprise owners and executives are enthusiastic to adopt the new Pooled Registered Pension Plans, according to a recent poll conducted by Leger Marketing on behalf of the Canadian Life and Health Insurance Association.
The poll revealed 68% of SME employers who do not currently offer a retirement plan of any kind are interested in providing PRPPs. Over 800 companies were surveyed in early December.
“Small and medium sized business executives are ready to embrace PRPPs as they look for new ways to keep employees and attract new people,” says Frank Swedlove, president, CLHIA. “We are on the cusp of making a fundamental shift in the pension landscape.”
Based on available Statistics Canada and industry data, more than 50% of private-sector workers do not have access to a workplace retirement plan. PRPPs will give them the opportunity to participate, and at a low cost usually only realized by very large pension plans.
The poll also showed that a large majority (71%) of all SMEs agree that employers should be required to offer some form of retirement plan to employees, especially given that PRPPs will be a low-cost alternative. Support for making it a requirement was strong in every region in Canada. It was highest among those who already have a plan (79%), and still very strong (66%) among those who do not have a plan.
Even though it is not mandatory for employers to contribute to the PRPPs in the current legislation, 73% of SME executives interested in providing PRPPs to their employees said they will “look at ways their business could contribute to the plan over and above what the employee puts into it”.
Two-thirds of survey participants believe that their employees will be interested in participating in PRPPs.
In November, the federal government tabled legislation introducing PRPPs. Provincial governments are expected to introduce similar legislation over coming months. PRPPs will provide small business owners and their employees with access to large-scale, low-cost, professionally administered pension plans.
The national online survey of 803 executives (senior manager level and up) from small and medium-size enterprises was completed from Dec. 6 to 15, 2011. A probability sample of the same size would yield a margin of error of +/- 3.46% 19 times out of 20.