A PRPP is a retirement savings option for individuals, including self-employed individuals.

A PRPP enables its members to benefit from lower administration costs that result from participating in a large, pooled pension plan. It’s also portable, so it moves with its members from job to job.

Since the investment options within a PRPP are similar to those for other registered pension plans, its members can benefit from greater flexibility in managing their savings and meeting their retirement objectives.

Joining a PRPP

Eligibility

If you have a valid Canadian social insurance number (SIN), you can participate in a pooled registered pension plan (PRPP) if you:

• work in a federally regulated business or industry for an employer who chooses to participate in a PRPP
• are employed or self-employed in Yukon, Northwest Territories and Nunavut or live in a province that has the required provincial standards legislation in place

Note

The PRPP Act applies to PRPPs within the legislative authority of the federal government. Each province must enact its own legislation for PRPPs to be available to individuals not covered in the criteria above. For more information on how to contact the federal and provincial supervisory authorities, see Pension supervisory authorities.

Participation

You can be enrolled into a PRPP by either:

• your employer (if your employer chooses to participate in a PRPP)
• a PRPP administrator (such as a bank or insurance company)

Once enrolled, a PRPP account is created under your SIN. You choose the amounts to be contributed from your pay cheque. Your contributions, your employers’ contributions, and any lump-sum contributions, are all pooled together and credited to your account.

Since the amount that can be contributed is based on the earned income you report on your income tax and benefit returns from prior years, it is important to file a return each year when participating in the PRPP to keep your RRSP deduction limit up-to-date.

Source: CRA