Canada Pooled Registered Pension Plan Guide (PRPP)
the Pooled Registered Pension Plan (PRPP) in Canada. The PRPP is the "retirement savings plan designed for the self-employed individuals and the employees of the small businesses who do NOT have the access to the employer pension plan or the group RRSP". The PRPP is the "pooled investment" — the "contributions from the multiple plan members are pooled together to achieve the lower investment fees". The PRPP is portable — the "plan member takes the PRPP with them when they change the employer". The Quebec VRSP (the "Voluntary Retirement Savings Plan") is the "Quebec-specific version of the PRPP" — the "employers with the 5+ employees must offer the VRSP" (the "mandatory employer offer" — the "Quebec regulation"). The PRPP contributions are the "tax-deductible" (the "same as the RRSP" — the "18% of the earned income up to the RRSP limit"). The investment growth is the "tax-sheltered" (the "no tax on the growth"). The PRPP withdrawals are the "fully taxable" (the "same as the RRSP withdrawal").
PRPP vs RRSP
- PRPP advantages: The "employer-sponsored" (the "automatic payroll deduction" — the "convenient saving"). The "pooled investing" (the "lower fees due to the scale"). The "portable" (the "transfer to the new employer's PRPP or the personal RRSP").
- RRSP advantages: The "full investment choice" (the "any eligible investment — the stocks, the ETFs, the GICs, the mutual funds"). The "higher contribution flexibility" (the "any amount anytime" — the "unused room carries forward"). The "no employer involvement".
- PRPP fees: The "management expense ratio (MER)" is 0.5% to 1.5% (the "pooled fund fees"). The PRPP fees are lower than the "individual RRSP mutual fund fees" (the "typical MER at 2% to 3%") but higher than the "self-directed RRSP ETF fees" (the "MER at 0.05% to 0.25%").
PRPP Contributions
- Employee contributions: The "automatic payroll deduction" — the "% of the salary" (the "default rate set by the plan" — the "employee can opt out or change the rate"). The contributions are the "tax-deductible" (the "RRSP deduction limit applies" — the "PRPP contributions reduce the available RRSP room").
- Employer contributions: The "employer may contribute" (the "optional" — the "no requirement to contribute"). The employer contributions are the "tax-deductible for the employer" and the "not taxable for the employee" (the "employer contribution is NOT the taxable benefit" — the "no CPP/EI on the employer contribution").
- Contribution limit: The PRPP contributions use the "RRSP deduction limit" (the "18% of the earned income up to $31,560 in 2025"). The PRPP contributions are reported on the "T4 or the T4A" (the "box 20 on the T4" — the "PRPP contribution amount").
Quebec VRSP
- Mandatory offer: The "Quebec employers with the 5+ employees must offer the VRSP" (the "mandatory employer offer" — the "exception: the employer already offers the RPP or the group RRSP").
- VRSP features: The "same pooled structure as the PRPP" — the "portable" — the "low-cost". The "VRSP is registered with the Retraite Quebec" (the "Quebec pension regulator").
- VRSP contributions: The "default employee contribution is 4% of the salary" (the "employee can change the rate or opt out"). The "employer contribution is NOT required" (the "employer may choose to contribute").
For the RRSP contributions and the deduction limits, see our RRSP Guide →. For the retirement income sources and the planning, see our Retirement Income Guide →.