Mr. Chair and honourable members, good afternoon.
On behalf of the Canadian Bar Association, I would like to thank you for the invitation to appear before the committee today to discuss our submission on Bill C-25 and to answer any of your questions. We are grateful for your parties' interest in securing the pension promise for all Canadians.
The Canadian Bar Association is a national organization representing more than 37,000 legal experts, including lawyers, law students, notaries and law professors throughout Canada. The primary objectives of the association include improvement of the law and the administration of justice. It is with these objectives in mind that I am speaking to you today.
The CBA submission you have received was prepared by members of the pension and benefits law section. This section consists of lawyers who have specialized knowledge and expertise in pension and benefits. They provide advice to a wide range of stakeholders, including pension administrators, employers, unions, employees and employee groups, and trust and insurance companies, to name a few.
The CBA has encouraged the government to adopt legislation permitting PRPPs in Canada as one means of improving the retirement savings system by providing an accessible, straightforward, and administratively low-cost retirement option for Canadians. We provided advice and recommendations to the government on the framework for PRPPs and on related tax issues as Bill C-25 was being developed.
The CBA was pleased with the government's introduction of legislation to allow PRPPs, which should fill a gap in the retirement savings system, particularly for the self-employed and for employees of small to medium-sized businesses that do not currently participate in registered pension plans. However, based on our expertise and knowledge of pension law, we have four general concerns about the bill's proposed framework.
First, PRPPs, as contemplated by the bill, do not appear to be a traditional pension plan, such as a defined benefit plan. Rather, they appear to be a new savings plan vehicle, analogous to group RSPs. As such, PRPPs may not, by themselves, provide adequate retirement income.
Second, PRPPs should strive for provincial harmonization to achieve the government's desired effect of offering simple, low-cost plans. Having to accommodate for different provincial treatments increases costs and could prevent eligible administrators from offering a single PRPP across the country.
Third, the bill should specifically allow associations of professionals to act as plan sponsors. We believe that this would help achieve the government's primary goal of achieving expanded pension coverage.
Fourth, the bill requires PRPP administrators to act as trustees, which will give rise to a fiduciary duty on their part. The CBA section questions how that duty will be reconciled with the administrator's ability to offer a commercial service.
Our written submission to the committee also contains a number of technical recommendations that we believe would help clarify the interpretation of the bill. While I do not have time to go through all of these recommendations in detail, I'd be pleased to answer any questions during the allotted time.
We at the CBA would be pleased to respond to any follow-up questions at a later date.
On behalf of the CBA, thank you again for the opportunity to appear before the committee.
I would like to thank you for the interest and time you have given me.
We commend all of you for your efforts with respect to this extremely worthwhile initiative.
Thank you.