Simplified Pension Plan: Advisor Perception and Knowledge Study
La Régie des rentes du Québec found that most advisors lack sufficient knowledge to implement the simplified pension plan (RRS), according to a study conducted by the agency. While advisors view the RRS as a superior choice to collective REER and RPDB combinations, a knowledge gap persists among distributors.
Why do advisors struggle with the RRS?
A study by La Régie des rentes du Québec revealed that most advisors do not possess enough knowledge to offer or implement the RRS. These advisors, along with nine financial institutions, are responsible for the administration and distribution of the plan to employers.
The agency conducted the research to evaluate the perception, knowledge, and interest of these professionals. Because advisors play an essential role in distribution, their lack of familiarity represents a barrier to the plan’s adoption.
How does the RRS compare to other retirement options?
Despite the knowledge gap, advisors view the RRS as a “good product,” according to the study. They identified it as a better choice than the combination of a collective registered retirement savings plan (REER) and a deferred profit-sharing plan (RPDB).
La Régie des rentes du Québec created the RRS specifically to allow small and medium enterprises (PMEs) to provide a genuine pension plan to their employees.
What happens next for the RRS?
La Régie des rentes du Québec is likely to use the study’s results to establish a promotion strategy for the coming years. The agency may implement various suggested actions to increase the plan’s visibility.
Future efforts could focus on addressing the specific knowledge deficits identified among insurance and collective pension advisors to facilitate easier implementation for PMEs.
Frequently Asked Questions
Who created the simplified pension plan (RRS)?
The plan was created by La Régie des rentes du Québec.
Who is the target audience for the RRS?
The plan is designed to allow small and medium enterprises (PMEs) to offer a retirement plan to their employees.
What did the study reveal about the RRS compared to other plans?
Advisors consider the RRS a better choice than the combined use of a collective registered retirement savings plan (REER) and a deferred profit-sharing plan (RPDB).
Do you believe better advisor training is the primary hurdle for SME pension adoption?