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What Is a PRPP? Pooled Registered Pension Plans in Canada

Updated

A pooled registered pension plan (PRPP) is a defined contribution pension for people who don’t have a workplace pension: employees of businesses that don’t offer one, and self-employed people. This page explains how PRPPs work, how they are taxed and where they are available. It is part of the workplace pensions hub.

How a PRPP works

A PRPP is a defined contribution pension plan run by a licensed administrator for employees and self-employed people; it is available only where PRPP standards legislation is in force, employers aren't required to offer one under federal law (Quebec requires its version, the VRSP, from employers with at least 5 eligible employees that offer no payroll-deduction RRSP or TFSA or registered pension plan), employer contributions are optional, and contributions use your RRSP deduction limit (no pension adjustment arises).

Because a licensed administrator runs the plan and the money of many members is pooled, the aim is low investment and administration costs. The CRA describes PRPPs as “professionally administered, defined contribution style pension plans,” designed so that “the fiduciary obligations related to the management of the plan on behalf of plan members will be shifted from the employer to licensed administrators.” Each member has their own account, and members may be offered investment options to choose from.

Tax and RRSP room

  • Contributions: “The Income Tax Act provides deductions in respect of both employee and employer contributions. Contributions and investment earnings are tax-exempt until such time as benefits commence to be paid.”
  • RRSP room: your own PRPP contributions are deducted within your RRSP deduction limit, and “employer contributions to an individual’s PRPP account also reduces unused RRSP deduction room.” No pension adjustment arises.
  • Payments in retirement are taxable income, like RRSP or pension income.

PRPP vs group RRSP

PRPPGroup RRSP
What it isA pooled pension plan, registered with the CRA, run by a licensed administratorA set of individual RRSPs arranged by the employer
Employer contributionsDeductible to the employer, not taxable income to youTaxable income to you (offset by your RRSP deduction)
Access to the moneySet by the PRPP law of your jurisdiction, which can lock it inUsually not locked in; withdrawals are taxable and the plan’s terms may limit them

The CRA’s comparison: “the employers in a PRPP contribute directly to the PRPP and receive a corresponding tax deduction. These employer contributions to the PRPP are not considered as taxable income to the employee. In a group RRSP, amounts that employers designate as a contribution are taxable income to the employee, and the employer does not receive a tax deduction.”

Where PRPPs are available

A PRPP needs PRPP standards legislation in your jurisdiction: federal law covers federally regulated employers, and each province decides for its own. Quebec’s version is the voluntary retirement savings plan (VRSP), which employers with at least 5 eligible employees (aged 18 or over with a year of uninterrupted service) must offer, unless they offer a payroll-deduction RRSP or TFSA or a registered pension plan instead. Your province’s pension regulator can tell you whether PRPPs are offered there; the CRA lists the pension supervisory authorities.

Changing jobs and retiring

  • Changing jobs: you can leave the money in your PRPP account or use the plan’s transfer options; “any subsequent employer may, but is not required to submit contributions on the members behalf.”
  • At retirement: the account can buy a qualifying annuity, payable for your life or the joint lives of you and your spouse or partner, starting by the end of the year you turn 71 (or the year it is bought, if later); the plan’s rules and your jurisdiction’s law set the other options.

Sources

The figures and rules on this page come from these sources, last checked against them on September 30, 2026. How we check facts.