Editor’s Note: Could this be a sign of things to come? The Governments of Canada and Saskatchewan just issued a joint news release about pension reform. Below is the press release as issued.
GOVERNMENTS OF CANADA AND SASKATCHEWAN RELEASE PROPOSALS TO IMPROVE THE SASKATCHEWAN PENSION PLAN
The Honourable Jim Flaherty, Canada’s Minister of Finance, together with the Honourable Ken Krawetz, Saskatchewan’s Deputy Premier and Minister of Finance, today released draft legislative amendments to accommodate changes to the Saskatchewan Pension Plan, as outlined by the Government of Saskatchewan in its 2010 budget.
“Saving for retirement is an important objective for Canadian families,” said Minister Flaherty. “We are continuing to move forward to provide greater flexibility and opportunity to achieve this goal. The Government of Saskatchewan’s proposed changes to the Saskatchewan Pension Plan are consistent with these objectives. Accordingly, I am proposing changes to the Income Tax Act to accommodate Saskatchewan’s proposals.”
“We are very pleased that the federal government has agreed to our request to increase the contribution limit,” said Minister Krawetz. “Plan participants requested this change and we are responding.”
The Saskatchewan Pension Plan is a voluntary defined contribution pension plan established by the Government of Saskatchewan. It offers an alternative for small businesses that do not offer their own pension plans, provides cost-effective professional investment management of retirement savings, and allows employees full portability of pension savings between employers.
The amendments proposed today to the Income Tax Act accommodate an increase in the annual contribution limit to the Saskatchewan Pension Plan to $2,500 from $600, and align its tax treatment with that of other tax-assisted retirement savings vehicles. These changes will ensure that Saskatchewan Pension Plan members benefit from additional features of the Registered Retirement Savings Plan and Registered Pension Plan rules that were not previously available to them. The proposed changes will apply to 2010 and subsequent taxation years.
The Government of Saskatchewan is simultaneously proceeding with amendments to provincial legislation and regulations required to enact these changes. “This is another great example of our governments working together to help families in Saskatchewan,” said the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food and Member of Parliament for Battlefords–Lloydminster.
“The Government of Canada is continuing to work with Saskatchewan and all provinces and territories on strengthening Canada’s retirement income system,” added Minister Flaherty.
Minister Flaherty indicated that the Government of Canada intends to table the proposed changes to the Income Tax Act in the House of Commons at an early opportunity.
Keywords: pension reform