Pooled Registered Pension Plans (PRPPs) are the result of the Canadian government’s resolute push to stimulate retirement savings for workers and self-employed persons.

In the face of a large absence of employer-provided pension plans and dwindling rates of retirement-geared investing, PRPPs offer a flexible and financially-viable method of saving adapted to the needs of today's itinerant workforce.

Participating employers are not permitted to manage PRPPs, but must instead enlist third party administrators (financial institutions, insurance companies) to handle the individual accounts (IAs) of plan members. As such, employees whose workplaces do not offer PRPPs may take the initiative to invest on their own, as may the self-employed.

The rules of PRPP Act apply to all PRPPs falling within the Canadian government's legislative authority, but legislation for PRPPs must also be enacted on a provincial level. Québec, having employer-provided pension plans available to less than 50% of its workforce, made Voluntary Retirement Savings Plans (VRSPs) mandatory for all small to medium sized businesses with five or more eligible employees under their hire starting July 1, 2014. While the status of PRPPs is still varied across provinces, Québec's VRSP is the first provincial plan to take foot and may serve to illustrate the effectiveness of the initiative.

As a draw, VRSP/PRPP plans boast lower fees and greater tax benefits than Group RRSPs, as well as more autonomy and flexibility. Eligible employees are automatically signed up by their employers but have the right to withdraw from the plan, which may also follow them to new employment opportunities.

Transfers between investments are flexible-as such, amounts may be transferred from one VRSP/PRPP plan to another, to an RRSP or a spouse's account, and so on. While employers are not required to make contributions, such dispensation may serve as a method of boosting morale and will be locked in, in keeping with VRSP legislation, to ensure retirement savings.

Employee contribution rates, on the other hand, may be changed at any time to accommodate changes in circumstances. Contributions are tax deductible and may be taken directly from an employee’s pay, providing a clear tax advantage. Funds accumulated are only taxed when withdrawn, which is possible in certain circumstances despite funds being locked in until retirement as a general rule. While the contribution limit for PRPPs/VRSPs is based on the individual’s annual RRSP contribution limit, the advantages of a pooled investment plan with low fees and flexible options make retirement saving a more approachable goal for employees.