New Pension Plan Will Help Microbusinesses

A a new pension plan for BC residents who don’t have one will help relieve fears of future poverty among BC’s large group of independent workers and small business employees.

When the BC government announced yesterday that it was creating group pension plans for BC workers, there was some joy in Rainland — and some cynicism.

The move was called everything from a brilliant pre-election gift to the province’s cash strapped small businesses, to a cynical election ploy that will disappear right after the election.

Me, I was just astonished at a fact dangled out during Finance Minister Mike de Jong’s announcement of the Pooled Registration Pension Plans Act. This was that that TWO-THIRDS of British Columbians don’t have access to any kind of pension system..

I don’t know if that meant two-thirds of all BC residents, or two-thirds of BC workers. In the first case, not that large a proportion of the populace would be affected, because so many British Columbians are part of the near-retirement Baby Boomer cohort or retirees who have moved here .   

In the second, it’s almost criminal that so many people in this province were destined to work until they dropped because they would have little or no income in their later years.

But the numbers shouldn’t be surprising: BC has, at 56% or 1.03 million,  one of Canada’s largest proportions of self-employed and employees of entrepreneurial small businesses. Ninety-five percent of BC businesses have less than 5 employees. These people rarely have pension plans although they may contribute to an RRSP..

A very few large companies still provide the traditional defined benefit pension plans that used to be the norm. Far more and usually smaller companies offer a pension that’s likely to be some kind of group RRSP or a defined-contribution plan, which carries far less risk for the company.

The Liberal government will, of course, use this new pension as an election plank in the upcoming provincial election.