Many Canadians are concerned about how the 2012 Federal Budget could affect their old age security.<\/p>\n
Government officials and financial experts are debating the needs of the aging baby boom generation.<\/p>\n
But for some small business owners, implementation of a new pension option for their employees could mean a more immediate impact – in the quality of their staff.<\/p>\n
The Harper Government is suggesting a Pooled Registered Pension Plan (PRPP) which would give employees of independent businesses the option to contribute to a pension fund. It would be managed by an outside financial institution which would invest the money in stocks on the contributors\u2019 behalf, similar to a Registered Retirement Savings Plan.<\/p>\n
The long-term benefits of this newly proposed system are being questioned, however, one beneficial side-effect may be enough for some business owners to support the new PRPP.<\/p>\n
Local business owner Mario De Marinis says he doubts if the new plan will make a difference to his own financial security.<\/p>\n
However, the owner of Someret Travel Agency says being able to offer potential employees any form of company pension could help small businesses like his attract a better, more stable staff.<\/p>\n
\u201cLook at all the people that want to get into the government because of the benefits. That\u2019s a major, major factor – especially in this city, it\u2019s hard to get good people.\u201d<\/p>\n
Helen Finlay, a Hospitality and Tourism Management student at Algonquin College, confirms De Marinis\u2019 speculations.<\/p>\n
When she graduates in the next few years, Finlay says her dream job is to eventually work for the Canadian government.<\/p>\n
\u201cI\u2019d like to work for Tourism Canada mainly because of the security and the benefits in it.\u201d<\/p>\n
According to Finlay, many students in the program hope to work for big names in the industry like Fairmont or Hilton after school.<\/p>\n
\u201cThe larger corporations are also attractive because they offer the security for their employees and they give you a lot of benefits,\u201d she says.<\/p>\n
She explains that while independent businesses, like Brookstreet Hotel in Kanata, may be able to offer some perks, they can\u2019t afford to take care of their employees as well as major hotel brands can.<\/p>\n
Ian Lee, a professor of strategic management at Carleton University and former financial policy analyst, says he is skeptical that the implementation of a PRPP will change the way small businesses are viewed in the job market.<\/p>\n
\u201cPeople know that big business pays higher wages and bigger benefits. The reason you work in small business is because you can\u2019t get jobs in big businesses.\u201d<\/p>\n
De Marinis and Finlay have their own concerns with the possible new pension system and both say they would need to do more research before deciding if they would participate since the system would only be an option for employees to pay in and for employers to add to the pool, not a requirement.<\/p>\n
De Marinis says he doesn\u2019t trust the stock market when it comes his own or his employees retirement savings being invested by an independent financial institution.<\/p>\n
He notes he\u2019d be more willing to add his own money if the Canada Pension Plan was extended to small businesses instead.<\/p>\n
Finlay says she thinks she would probably choose to have part of her paycheck set aside in a PRPP if she were to work for a small business.<\/p>\n
\u201cI want to know that when I retire I\u2019m not going to have to put so much of my own money in savings. If I\u2019m not working for the government, it would probably be my best bet.\u201d<\/p>\n
One thing all three say they agree on is that a Pooled Registered Pension Plan, despite its flaws, would be an improvement on the current situation for small business employees looking to increase their pensions.<\/p>\n
\u201cIt\u2019s not perfect, but it\u2019s better than nothing,\u201d says Lee. \u201cI think this legislation is a good step forward, but it\u2019s not going to solve all the problems.\u201d<\/p>\n
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